Remote Online Closing GraphicIt’s two days before closing simultaneous real estate transactions. You’re finally moving up from that townhouse into a single-family home. You travel all over the world for work and now, you’re in Budapest finishing up a project, when you find out that, due to the Novel Coronavirus (COVID-19), International travel has been suspended. You cannot possibly make it to an embassy to get the docs properly executed in time because the Embassies are all open for urgent matters only. If you don’t complete the transactions, you will lose a deposit of $30,000. What do you do?

On January 1, 2020, Florida’s legislation on using audio/visual technology to notarize documents became effective. This is very useful legislation that provides notary execution alternatives, allowing buyers and sellers to have their signatures notarized wherever they are in the world.

The Florida Statues now permit specially licensed Remote Online Notaries “RON”s, to use audio/visual technology to notarize documents. This is a process where the signer/consumer is no longer required to be “physically present” before the Notary in order to properly execute and notarize a document. This new alternative to getting docs executed allows them to be signed and notarized, digitally, all without requiring the Consumer and Notary being physically present in the same room. This new alternative provides incredible options for Consumers who are international or out-of-state.

So, here you are, thousands of miles away from Florida and you need to get this transaction closed or you will lose $30k. Find a Remote Online Notary and your problems will be solved! But, you’re not sure what that even means or how to even find a RON. As the title implies, do not fear…both partners at Khani & Auerbach are now Remote Online Notaries!

Just like any process that is governed by legislation, there are rules the RON must follow:

(1) The RON must be physically in Florida but signers, referred to as “consumers” or “principals” or any witness to a principal may be anywhere in the world;

(2) The RON must record the audio-video conference using real-time, two-way communication by electronic means where participants are able to see, hear, and communicate with one another;

(3) At the commencement of the recording, the RON must clearly advise the Consumer/Principal that the RON will be notarizing;

(4) Provide a description or identification of the records to be signed;

(5) Ask where the Consumer/Principal is currently located? If the Consumer/Principal is not in Florida, confirm that they want the notarization performed by a Florida Notary and under Florida law;

(6) Confirm the Consumer/Principal’s’ identity by either: attesting to personally knowing the signer; or from the signer: (i) remotely presenting a government issued ID and confirming their identity; and (ii) passing a “credential analysis” (where a third party verifies the government-issued ID’s validity); and (iii) passing an “identity proofing” (where a third party verifies the signer’s identity through questions or via biometric verification); and

(7) Obtain a declaration from the signer that their signature is knowingly and voluntarily made.

Consumer/Principal’s Identity Verification:

If the Consumer/Principal is not personally known to the RON, the Consumer/Principal must go through what’s called Knowledge Based Authentication (KBA), a process very similar to that of financial institutions used to verify a consumer’s identity. The questions are drawn from various data bases, including your individual credit and public information collected about you from the internet. The Consumer/Principal is provided with five questions, drawn from both public and/or proprietary data sources, and must, within two minutes, correctly respond to four out of five questions.

Each of the five questions provide five possible answer choices per question. If the Consumer/Principal fails to respond correctly to 80% of the questions, then the Consumer/Principal will be offered one more additional  opportunities to complete another set of KBA questions and during that attempt, the Consumer/Principal is limited to being asked with more than three (3) questions from the prior attempt.  Should both attempts fail, there is a 24-hour waiting period in which you must wait before you able to get another opportunity to go through the identity verification process.

Once the government issued identification and identity verification have been confirmed, you will connect via audio/video with the RON. The RON will probably ask the following questions before the signing, Who is in the room with you? Are you under the influence of any drug or alcohol today that impair your ability to make decisions? Do you have any physical or mental condition or long-term disability that impairs your ability to make decisions?

You might be wondering what to do if a document requires witnesses. There are a few options. The witness can either be physically present with the Consumer/Principal or can also be present using the audio-video technology (in other words, be in the room with the RON). If the witness is not present with the Consumer/Principal then, (1) the RON must verify the witness’ identity; (2) the witness must hear the Consumer/Principal say “I have signed the electronic record”; (3) the witness must verbally confirm they are a “resident of and currently physically located in the US or its territory.”

After all the formalities of signing have been complete, the RON will then use an electronic notary seal, identifying the RON as an “online notary.”  All the documents where the RON has acknowledged and signed will contain an electronic notary stamp, similar to that which you may be familiar with.    The notary process will then be complete.

The RON will then be able to provide electronic copies of the given series of related electronic records, if requested by: (a) A party to the electronic record, or (b) In real estate transactions, the title agent, settlement agent, or title insurer who insured the electronic record or engaged the online notary public with regard to such transaction.

BEFORE you can take advantage of the RON process, you must ensure that you meet all the system requirements.  The checklist below explains what you need to optimize your experience during the scheduled RON eClosing.

(1) Login information and 6-digit PIN: The RON will send you an invitation which will include a link to create your profile and the PIN.

(2) Valid Identification: You will need to have a valid state-issued ID, Driver’s License, or government-issued passport.

(3) Smartphone with both text message and camera capabilities: During the process, you will be required to take a picture of your ID (in Landscape mode) during the RON eClosing session.

(4) Computer/Laptop with working camera, microphone, and speakers: Cell phones and tablets (such as iPads) are NOT COMPATIBLE with RON.  Hybrid tablets (like a Microsoft Surface Pro) are the exception and are compatible when using Google Chrome.

(5) Latest version of a compatible web browser and Windows 8.1 or higher: While Google Chrome, Mozilla Firefox and Microsoft Internet Explorer are all compatible, we are finding that Google Chrome works best.

(6) Strong, uninterrupted internet connection with minimum 15 MBPS download/upload speed for an optimal experience: The most important aspect of this process is having a strong internet connection.  If the process gets interrupted at any point, the identity verification process will have to restart from the beginning.  FIND THE BEST INTERNET CONNECTION!

Remember, when you purchase, refinance, sell, or obtain a home equity loan/line on a home, signing the closing documents is one of the FINAL steps in the transaction.  Traditional closings have required in person, wet signing of large amounts of paper documents.  With Remote Online Notarization, we can now “meet” online to electronically sign and notarize your closing documents.

At Khani & Auerbach, we are dedicated to providing as much information to assist you in becoming a home buyer. Please be sure to follow us on FacebookTwitter, Instagram and LinkedIn and for additional useful information.



Florida Expands Documentary Stamp Tax Newlywed Exemption to All Married Persons

Florida Expands Documentary Stamp Tax Newlywed Exemption to All Married Persons

QUICK RUNDOWN: On July 1, 2018, the documentary stamp tax statute amendments became effective.  This amendment created a new exemption from documentary stamp taxes for certain instruments (i.e., deeds) that transfer encumbered (a/k/a properties with mortgages) homestead property between newlywed spouses within the first year of marriage. Governor Ron DeSantis subsequently signed into law House Bill 7123, further amending Florida’s documentary stamp tax statute. The item signed by DeSantis becomes effective July 1, 2019 and allows for expansion of the 2018’s “newlywed exemption” to apply to all married persons.  The expanded exemption (doc stamp exemption for all married persons) takes effect on July 1, 2019.


Florida imposes a documentary stamp tax on deeds and other documents that transfer an interest in Florida real property. Section 201.02 of the Florida Statutes governs certain transfers or conveyances that are subject to documentary stamp taxes.

In general, documentary stamp taxes are:

  • Determined based on the consideration given for the transfer. For example, with the exception of Miami-Dade County, documentary stamps in Florida are taxable at a rate of $0.70 for every $100 of consideration ( 201.02(1)(a), Fla. Stat.).
  • Paid to:
    • the clerk of the court if the document evidencing the transfer of title is recorded; or
    • the Florida Department of Revenue, if the document is not recorded.

Consideration may include:

  • The amount paid for the property.
  • The discharge of an obligation (for example, payment of a demand note).
  • The unpaid balance of an underlying mortgage encumbering the property at the time of the transfer.

Section 201.02 of the Florida Statutes also includes limited exemptions from documentary stamp taxes. For example, no tax is due on a deed between spouses or former spouses transferring an interest in their marital home incidental to divorce (§ 201.02(7)(a), Fla. Stat.).

Newlywed Exemption

The 2018 Amendment created a new exemption for transfers of encumbered homestead property (or any interest in the property) between newlywed spouses within the first year of marriage.

Under Section 201.02(7)(b) of the 2018 Amendment, a deed between spouses is not subject to documentary stamp taxes if:

  • The transferred real property is homestead property.
  • The only consideration for the transfer is the balance of an underlying mortgage or other lien encumbering the homestead property.
  • The deed is recorded within one year after the date of marriage.

The exemption applies to transfers or conveyances from:

  • One spouse to the other spouse.
  • One spouse to both spouses.
  • Both spouses to one spouse.

(§ 201.02(7)(b), Fla. Stat.; see Florida Department of Revenue, Florida Documentary Stamp Tax.)

The 2018 Amendment does not affect the exemption for transfers of a marital home between spouses or former spouses incidental to divorce (§ 201.02(7)(a), Fla. Stat.).

Removal of Limitation

The great news here is that this 2019 Amendment removed the requirement that the deed be recorded within one year after the date of marriage, expanding the documentary stamp tax exemption to all married persons. This means that the limitations for the deed to be recorded within one year after the date of marriage NO LONGER APPLIES and the deed between spouses is not subject to documentary stamp tax if:

  • The transferred real property is homestead property; and
  • The only consideration for the transfer is the balance of an underlying mortgage or other lien encumbering the homestead property.

The 2019 Amendment did not change any of the other requirements to qualify for the exemption.

What does this all mean?

This 2019 Amendment provides the added benefit to homestead property under Florida law, providing married couples as much time as they need to plan and coordinate transfers of homestead property among themselves.

Despite the new exemption, the 2019 Amendment does not provide relief to spouses (newlywed or otherwise) seeking to transfer encumbered (mortgaged) homestead property to another form of ownership (for example, a revocable trust). Be sure to speak with a Real Estate attorney to discuss the advantages and disadvantages of transferring homestead property in advance of a couple’s marriage to avoid inadvertently compromising any benefits allowed under Florida law.

At Khani & Auerbach, we are dedicated to providing as much information to assist you in becoming an educated homeowner. Please be sure to follow us on Facebook, Twitter, Instagram, and LinkedIn for additional useful information.  Please call if you need additional information, we are happy to help!


2018 Taxable Values Estimate and Homestead Exemptions for Broward County, Florida

For those of you who live in Broward County, Florida, this could be very valuable and helpful information.  Below is an informative newsletter originally published by Marty Kiar of the Broward County Property Appraiser’s (BCPA’s) office.

2018 Estimate of Taxable Values

The preliminary 2018 property values will be posted on BCPA’s website at on June 1. This will be your first opportunity to review your 2018 property value and contact our office if you believe the just value to be inaccurate. This is important because the amount of property taxes that you will be asked to pay is based on the relationship between the tax rates set by your local taxing authorities and the assessed value of your property as determined by our office. Florida law requires our market values be one year in arrears meaning we use the qualified sales of comparable properties from January 1, 2018 back through January 2, 2017 for the 2018 property values. If you purchased your property in 2018, your 2018 purchase price will be used in setting your property’s 2019 market value. For questions regarding your residential property, please call 954-357-6831. BCPA will be mailing the 2018 TRIM (proposed tax) Notices to all Broward property owners in mid-August. This notice will show your property’s 2018 market value, assessed value, exemptions and proposed tax rates as set by the various taxing authorities.

Did You Have Homestead Exemption on One Home and Purchase Another?

If you had Homestead Exemption on a property in 2016 or 2017 and have purchased a new permanent residence in Florida, please make sure you have applied for both Homestead Exemption and Portability at your new residence. Portability allows you to transfer the “Save Our Homes” savings you built up by having Homestead Exemption on any Florida property to another Homesteaded property in Florida. To transfer the Save Our Homes benefit, you must establish a Homestead Exemption at the new home within two years of January 1 of the year you sold or moved from the old homestead (not two years of the sale or move date). Note: a Portability application transfers the savings you have earned, but it does not automatically transfer your Homestead Exemption. You must apply for both Homestead Exemption on your new home and complete a Portability application. The Portability application can be found on our website at For questions regarding Homestead Exemption, Portability or any of the available tax-saving exemptions, please call our Customer Service representatives at 954-357-6830.

Meet the Broward County Mobile Exemption & Information Team

The Broward County Property Appraiser’s Office has a group of representatives visiting homeowner and community groups around Broward County to educate property owners about the role of our office and provide important tax-saving information. To find out when BCPA will be assisting residents and property owners in your community, simply visit their event calendar online at If you would like a representative to attend one of your meetings or events, please contact Michael Clark, Mobile Exemption & Information Team (MEIT) Manager, at 954-357-6905 or

Khani & Auerbach is committed to educating the public about various topics in real estate.  For more information, or if you have any real estate transaction needs, please do not hesitate to contact us.


Las Olas

Gratefully, the nation’s housing market for 2018 is looking good, but we continue to see first-time millennial buyers struggling with affordability, especially in high-priced areas like Los Angeles, San Francisco, Boston, New York and Washington DC.

Various Florida residential real estate markets continue to be affordable markets.  Interest rates and home prices are both rising, so first-time home-buyers, a majority of which are Millennials, are encouraged to make the switch from renting to owning sooner, rather than later.

Mortgage rates will inevitably rise, and this increase will only result in existing borrowers/homeowners STAYING PUT.  Rising rates may also lead to homeowners seeking home improvement loans or home equity lines of credit instead of moving.  Less movement in real estate, means less inventory.

So, what’s driving the housing market? Strong buyer demand, limited inventory, and first-time buyers.  The first two factors being the more important for setting the real estate industry’s tone.

There is definitely a shortage of “good properties” and finding that perfect property tends to be the problem for most Millennials.  That’s a large part of the reason we are recommending that Millennials try to be realistic, not have expectations of moving away from renting right into the home of their dreams.  The home of their dreams will come with time, but buying something affordable is a great way to start the home-buying process

With increased demand and good appreciation, first-time home-buyers can eventually move up to the property of their dreams.  This all doesn’t happen overnight and that can sometimes be frustrating for people who may be used to getting instant gratification.

So, what’s the bottom line here?  Take baby steps.  Buy your first home, but be realistic and find something affordable. Don’t live for your house, but live in your house.  The American dream will follow, but whatever you do….STOP RENTING!

At Khani & Auerbach, we are dedicated to providing as much information to assist you in becoming a home buyer. Please be sure to follow us on Facebook, Twitter, Instagram, LinkedIn and Google+ for additional useful information.

Avoid Being a Victim of Wire Fraud Schemes When Buying a Home

Buying a home is an exciting time. You’ve saved, found the perfect home and planned the move. Now, the closing day for your home is just around the corner.

The American Land Title Association wants to make sure your home purchase doesn’t get derailed by a dangerous threat that could keep you from getting the keys, painting walls and decorating. Criminals have stolen money meant for the purchase of homes through malicious wire fraud schemes targeting consumers across the country.

Criminals begin the wire fraud process way before the attempted theft occurs. Most often, they begin with a common social engineering technique called phishing. This can take the form of email messages, website forms or phone calls to fraudulently obtain private information. Through seemingly harmless communication, criminals trick users into inputting their information or clicking a link that allows hackers to steal login and password information.

Once hackers gain access to an email account, they will monitor messages to find someone in the process of buying a home. Hacks can come from various parties involved in a transaction, including real estate agents, title companies, attorneys or consumers. Criminals then use the stolen information to email fraudulent wire transfer instructions disguised to appear as if they came from a professional you’re working with to purchase a home. If you receive an email with wiring instructions, don’t respond. Email is not a secure way to send financial information. If you take the bait, your money could be gone in minutes.

“Attorneys and title companies have taken many steps to combat this problem, such as putting consumer warnings on websites and communications, securing email communications and sending notices to consumers and real estate agents informing them of the scams,” said Michelle Korsmo, chief executive officer of the American Land Title Association. “But the criminals are smart and constantly alter their tactics to steal information and money.

“Everyone involved in real estate transactions must also be aware of the potential losses as criminals phish for information and stalk home closings, hoping someone makes a mistake. If someone does mess up, it could cost your savings or retirement.”

Here are five tips to protect against wire fraud:

1. Call, don’t email: Confirm all wiring instructions by phone before transferring funds. Use the phone number from the title company’s website or a business card.

2. Be suspicious: It’s not common for title companies to change wiring instructions and payment info.

3. Confirm it all: Ask your bank to confirm not just the account number but also the name on the account before sending a wire.

4. Verify immediately: You should call the title company or real estate agent to validate that the funds were received. Detecting that you sent the money to the wrong account within 24 hours gives you the best chance of recovering your money.

5. Forward, don’t reply: When responding to an email, hit forward instead of reply and then start typing in the person’s email address. Criminals use email address that are very similar to the real one for a company. By typing in email addresses you will make it easier to discover if a fraudster is after you.

This article is courtesy of ALTA. The American Land Title Association helps educate homebuyers about title insurance so they can protect your property rights. Check out to learn more about title insurance and the home closing process. Attorney Khila Khani is proud to serve as a HOP (Homebuyer Outreach Program) Leader with ALTA. If you have any questions about this topic or need assistance, please contact us.

FIRPTA Withholding Rate to Increase to 15%

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Effective Feb. 16, FIRPTA general withholding rate increases from 10% to 15%

Author: Jonathan H. (Jason) Warner

Recent federal tax legislation increases the FIRPTA general withholding rate from 10% to 15% effective for closings on or after February 16, 2016. Closing agents should adjust their procedures and forms to reflect this change. (If you want a reference, it is H. R. 2029, now known as Public Law 114-113. See Section 324 for text of changes).

The 10% rate will still apply for those transactions in which the property is to be used by the Transferee as a residence, provided the amount realized (generally the sales price) does not exceed $1,000,000, and the existing $300,000 “exemption” remains unaffected. So here are your new guidelines:

• If the amount realized (generally the sales price) is $300,000 or less, AND the property will be used by the Transferee as a residence (as provided for in the current regulations), no sums need be withheld or remitted.

• If the amount realized exceeds $300,000 but does not exceed $1,000,000, AND the property will be used by the Transferee as a residence (there are no regulations that specifically address these changes but many are assuming you can follow the current regulations for the $300,000 exemption), then the withholding rate is 10% on the full amount realized.

• If the amount realized exceeds $1,000,000, then the withholding rate is 15% on the entire amount, regardless of use by the Transferee.
The well-documented flaws and risks of the $300,000 exemption will likely continue although future regulations could change existing procedures. Members should document the Transferee’s intent to use the property as a residence as best they can and point out to the Transferee the risks of allowing the exemption to apply to their transaction. Under the law, the Transferee is the withholding agent and is responsible for withholding and remitting the proper amount to the IRS. Members should also be alert for situations where the foreign Transferor forces the Transferee to claim residence status merely to lower the withholding rate, since the Transferee could be liable for any additional withholding tax, penalty, and interest if their intent is ever challenged by the IRS.
The current FAR/BAR contract form contains language specifically referring to a 10% withholding. An amendment to the contract for closings scheduled on or after February 16, 2016 should be added to change the potential rate of withholding to 15%.
The remainder of the FIRPTA changes in the recent legislation involve REITS, but a new exemption from FIRPTA taxation and withholding is provided for qualified foreign pension funds. A new certification form likely will be needed to document the exemption.

It is recommended that you seek the advice of a tax specialist regarding the implementation of this new rate, but if you have any questions about how this change might applies to you or a transaction, please do not hesitate to contact Khani & Auerbach.

Reprinted with permission from Attorney’s Title Insurance Fund

Is Consummation the Same Thing as Closing?

Waterway On October 3rd 2015, the Consumer Finance Protection Bureau (CFPB) implemented new regulations with respect to consumer financing. These regulations affect anyone who purchases real estate and obtains a loan (whether through a bank, mortgage broker or private lender). This video explores a few of those changes and how some of the terms we have been used to hearing for so many years in the title insurance industry are going to change.

One of the most interesting changes comes with terminology used in the process. As title agents that issue title insurance, we are well acquainted with these new terms and are sharing them with you. Something new that is explored in this video below, produced by one of our underwriters, Old Republic Title, is the use of the word “consummation.” In Florida, we are using the word Consummation in place of Closing. Additionally, while we were all used to the word “HUD” or “Closing Statement,” that term has also been replaced with the “Closing Disclosure”. While the HUD or Closing Statement might not necessarily be completed until moments before the closing, under the new regulations, the Closing Disclosure must be received by the Borrower at least three business days prior to the Consummation.

At Khani & Auerbach, it is our goal to educate the public as much as possible about these changes. We hope to provide you with useful videos over the next few months that will assist you in your understanding of these changes so that when you are ready to undertake the purchase of residential real estate, you are armed with all the knowledge to get through the transaction as smoothly as possible. We are here to help.

6 Steps Every Homebuyer Should Expect for Closings


Get owner’s title insurance and buy your home with confidence
Your long home-buying journey is almost over. You found the home you love, the seller agreed to your offer and now it’s time for closing. Of course, there’s a lot to think about right now, and the last thing you want is something¬ to go wrong. So make sure you work with an experienced closing agent to help ensure the details come together and everything runs smoothly.

As soon as the seller accepts your offer, the behind-the-scenes work begins. You can expect closing to happen within 30 to 45 days.

1. Select a Closing Agent
If you are working with a real estate agent, with your permission, he or she may place an order with a closing agent as soon as your sales contract is accepted. The closing agent can be a real estate attorney or title company.

Most homebuyers rely on their real estate agent to select a closing agent—someone they work with regularly and know to be professional, reliable and efficient. However, you are always permitted to choose your own closing agent. The closing agent will oversee the closing process and make sure everything happens in the right order and on time, without unnecessary delays or glitches.

2. Make a Good Faith Deposit
First, a contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy. The agent will also put your good faith deposit into an escrow account, where the funds will remain until closing. Typically, the real estate attorney or title company can hold those funds in escrow until closing.

3. Title Search is Conducted
Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on. If a problem is discovered, most often the title professional will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.

4. Lender’s Title Insurance Policy and Owner’s Title Insurance Policy
There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it ONLY protects the lender.

It strongly recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from county to county within the State of Florida, so ask your settlement agent for guidance before closing.

5. Obtain a Closing Disclosure
Your lender must provide a Closing Disclosure to you at least THREE (3) days prior to closing. Your lender will provide this Closing Disclosure directly to you, the Buyer, at a minimum, three days before you close your transaction.

If you or your lender makes certain significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new Closing Disclosure form and an additional three-business-day waiting period after receipt of the new form. The three (3) day period will reset or apply if the creditor:
• Makes changes to the APR above ⅛ of a percent for most loans (and ¼ of a percent for loans with irregular payments or periods)
• Changes the loan product
• Adds a prepayment penalty to the loan

If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.

6. The Finish Line: Prepare for Closing
As closing day approaches, the closing agent orders any required updated information. Once the closing agent confirms with all parties, (the lender, the buyer and the seller), a final date for closing will be set, along with time and location of the closing.
On closing day, all of the behind-the-scenes work is complete. While you’ve been busy packing, ordering utilities and coordinating the movers, your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order.

This document provides a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described herein. For exact terms, conditions, exclusions, and limitations, please contact our office.

New Mortgage Disclosures Expected to Delay Real Estate Closings

Our sincerest apologies for not having provided you with new content in such a long time, but we have been working tirelessly on becoming prepared for the changes ahead! In just a few short days, federal laws will be implemented that will affect the way homebuyers finance their mortgages in real estate transactions. The Consumer Financial Protection Bureau created “TILA RESPA Integrated Disclosure,” known in the industry as TRID, and TRID implementation begins on Saturday, October 3, 2015. Most, if not all, of the experts in our industry agree that these changes could increase the time to close on purchases by at least double. Take note, these changes do NOT affect all-cash or commercial transactions. Furthermore, the implementation of TRID will only affect loan applications that are taken on residential purchases that are financed ON or AFTER Saturday, October 3rd. So, if you are able to squeeze in a loan application before that date, you will avoid being subject to these changes. Our local colleague, Gary M. Singer, outlines all these changes and we have reposted his article originally published in the Sun Sentinel, below:

Sept. 25, 2015

By GARY M. SINGER Sun Sentinel – Tribune News Service

Big changes are planned for how homebuyers finance their mortgages, and that almost certainly means that closings will take longer. In some cases, closings that now speed through in 30 days probably will require at least 60 days.

The changes had been expected to begin in August, but the effective date was pushed back to Oct. 3.

After the housing crash, Congress felt that we needed a better system of mortgage disclosures and procedures so that Americans can better protect themselves and make the best choices when getting home loans.

The Consumer Financial Protection Bureau was created and charged with accomplishing this.

The bureau decided that the four existing disclosure forms required under federal law would be changed into two new, more comprehensive documents — a Loan Estimate and a Closing Disclosure.

These forms are known as the “TILA RESPA Integrated Disclosure,” or more commonly, TRID.

In addition, the closing process was unified so that all 50 states use the same forms and procedures.

Who Do These New Rules Apply To?
They apply to residential properties that include a mortgage as part of the transaction — both sales and refinances.

The rules are designed to protect the buyer/borrower, but they will affect all parties to the transaction.

Lenders are bearing the brunt of ensuring compliance with the new rules, making the lender responsible for getting all of the other parties on board. The rules do not apply to commercial transactions or all-cash deals.

What is Changing?
Buyers applying for loans will get a Loan Estimate (instead of the current Good Faith Estimate) within three days of applying for the loans.

The new form is designed to highlight key terms to enable borrowers to shop around for the best deals. It’s supposed to be user-friendly and almost certainly will be, considering how confusing the current form is.

The Closing Disclosure must be received by the borrower three business days before the closing. If the form is mailed, couriered or emailed, the lender must allow an extra three business days on top of that.

This means that the closing can’t occur for at least six business days after the lender sends out the completed Closing Disclosure.

This is a massive change from the way it is now, when some of the information is still being filled in on the closing day, sometimes even while the parties are sitting at the closing table.

The biggest issue I have with these new forms is that they significantly downplay the importance of getting owner’s title insurance policies, which is money well spent. I can’t think of any situation in which not getting this very important coverage would be a good idea. And I’ve seen many instances in which not having title insurance costs a buyer the home.

K&A note: There are many ways a person can lose their home as a result of not having an Owner’s Policy for Title Insurance. Should you wish to learn what they are, contact us and we’ll share that information with you. It’s certainly not a short list and being uninsured can definitely result in the loss of property.

What do Buyers and Sellers Need to Do?
Closing agents — used to finalizing the process at the last minute to accomplish everyones’ rush to close — now will need to get the final closing information to the mortgage lender at least 10 days before the closing date so that the lender can complete the Closing Disclosure in time to get it out six days before the scheduled closing.

Realistically, to accomplish this, buyers and sellers will need to add three to four weeks to their closing time lines.

To make matters even more confusing, all of the standard purchase contract forms have been recently changed to address the new rules.

That’s causing real estate professionals to learn the new forms.

K&A note: If you are a real estate professional, please reach out to us for guidance on the new forms. We are all in this together and are looking forward to making all future transactions go as smoothly as possible.

Be sure your real estate agents and others on your team are aware of the new information and have been trained on how to deal with it.

Fortunately, the industry seems ready for this change, and there is plenty of training available for those in the business.

About the Writer
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

This article, originally dated 9/25/15, was re-posted from the Sun-Sentinel, distributed by Tribune News Service.

Contracts to Buy Residential Real Estate Climbs to 9-Year High

Victoria Park canalAccording to the National Association of Realtors (NAR), pending home sales continued to make impressive gains last month, rising to the highest level since April 2006. In May, more Americans signed contracts to purchase homes, as these pending sales reached their highest levels in over nine years.

Large gains in pending home sales in the Northeast and West helped to offset small decreases in the Midwest and South.
Here’s a more detailed look at how the Pending Home Sales Index performed regionally in May:

• Northeast: rose 6.3 percent to 93.9 last month and is 10.6 percent above a year ago.
• Midwest: fell 0.6 percent to 111.4 but remains 7.8 percent above year ago levels.
• South: dropped 0.8 percent to 127.8 but are still 10.6 percent above last May.
• West: rose 2.2 percent to 104.5 in May and are 13 percent above a year ago.

NAR’s Pending Home Sales Index rose 0.9 percent in May to 112.6 in May. The index is at its highest level since April 2006 when it was 113.7. The index has increased 10.4 percent over the past 12 months, putting it just below the April 2006 level—which was more than a year before the housing bust triggered the Great Recession.

Lawrence Yun, NAR’s chief economist states, “The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring. It’s very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive.” Although there are strong sales, Yun cautions that these are causing home prices to rise to an “unhealthy and unsustainable pace.”

Pending sales are an indicator of future purchases. Additionally, a one- to two-month lag usually exists between a contract and a completed sale.

Steady job growth, in conjunction with low but rising mortgage rates, has created greater urgency to buy homes. The gains reflect both a stronger economy but also the pressures to purchase a home before both prices and the cost of borrowing become potentially unaffordable. Despite Yun’s opinion, some other economists say that the job gains should be adequate to overcome the drag from higher rates.

Relatively low mortgage rates have assisted the real estate market, but the recent rate increases in recent weeks may possibly be causing more potential buyers to close transactions before higher rates inhibit their ability to purchase a home.
Average rates for a 30-year fixed-rate mortgage were 4.02 percent last week, up slightly from 4 percent in the prior week, according mortgage giant Freddie Mac. The average has risen from a 52-week low of 3.59 percent.

Chief economist at Pantehon Macroeconomics, Ian Shepherdson states, “We think the housing market can cope with slightly higher mortgage rates, taking home sales to new post-crash highs over the next few months.”

Median home prices climbed 7.9 percent over the past 12 months to $228,700, about $1,700 short of the July 2006 peak.

Call the attorneys at Khani & Auerbach (954) 921-1517 if you have any questions about this or any real estate matters.