Florida Real Estate Closings

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Esquire Title Company

Esquire Title Company is the title insurance agency affiliated with the law firm of CPC Law.  Esquire serves real estate investors, realtors, mortgage lenders and consumers with real estate closing, escrow and title services.  Esquire is a member of the Attorney’s Title Fund and issues title insurance policies through the underwriter Old Republic.

Hard Deals Made Easy

Why choose Esquire to serve your title and closing needs?  We’re the second-best title company in Florida.  Who’s the best?—everybody else who says they’re number one.

Talk is cheap and all title companies in this competitive space boast of great customer service, responsiveness, diligence, skills, knowledge, etc.  Telling you, as a potential client or referral source, that we do all these important things well and you’ll be very happy doesn’t mean anything until you try us out and see for yourself.

What we do offer that’s beyond dispute is that doing business with Esquire creates a special relationship and bond with not just our title company, but affiliated law firm, CPC Law.  Our attorney will answer calls from friends who deliver title business.  We will give legal advice and save our allies money and time on a wide variety of legal matters that will arise in real estate and other areas of life and business.

Another advantage to our title clients and friends based on this relationship is Esquire’s ability to deliver deal leads.  We have a strong network of investors and belong to a community of quality, successful players in the real estate business.

There are many opportunities for the title company and law firm to be a “hub” and center of influence to benefit our friends.  Many clients come to our law firm needing to sell a property.  We find deals all the time and refer them to investors and real estate agents with whom we do business knowing they can help our clients effectively and ethically.

A typical example is in the probate legal space.  CPC Law has an active probate practice in which we represent the heirs of people who have passed away and need probate legal proceedings to pass the title of assets, including real estate, to the heirs.  A large majority of these probate matters involve real estate the heirs want to sell it.  They’re usually motivated sellers, often from out of state, who just want to close as quickly as possible to cash in the equity of their inheritance.

These clients come to the law firm for guidance and advice on many matters, including how to sell their inherited properties.  We introduce clients to our investor and realtor friends who can help them make a deal.  Many of the heirs we represent are not flush with cash but have real estate equity waiting for them at the closing table. To help them, our law firm will very frequently agree to defer payment of legal fees for the probate work until the closing.  We’ll also, of course, offer to close the deal with Esquire.

In the entire business world, including real estate, people do business with those they like and trust.  An extension of that sentiment is that people who do business together help each other out.  We can never have too many allies.  Though Esquire and CPC Law are limited by laws and ethical rules in how they can help their friends, we strive to be useful, productive and contributing business partners to show our appreciation, within those legal and ethical boundaries.

What Is Title Insurance?

Title insurance is issued in the large majority of real estate transactions in Florida.  The purpose of this protection is to cover property owners and their mortgage lenders against a large variety of issues that could affect clear title and the marketability of property.  Unlike other forms of insurance that indemnify policy-holders against future events and occurrences, title insurance covers things from the past, such as liens on a property or judgments against sellers that “cloud” the title.

Leading up to a real estate closing, we order a title search report and issue a commitment of title insurance.  The commitment is a summary of the title search results.  Our title examiners review the public records relating to the property itself and the title owners.  They find documents recorded in the public records that may constitute claims on the property.  Such documents, known as “encumbrances” or “clouds” on the title need to be resolved somehow before our title agency can issue a title insurance policy.

If a mortgage lender finances the purchase, we’ll issue a lender’s policy of title insurance to protect their interest in the amount of the loan.  The buyer will get an owner’s policy in the amount of the purchase price.

The commitment contains requirements, which are steps that need to be taken to issue the policy.  It also includes exceptions to coverage.  Exceptions are matters that may affect the quality of, or restrictions to, the title to the property, but will not be covered by the insurance policy.  Common examples are deed restrictions imposed by homeowner’s associations and utility easements, which allow service people limited access through the property.

We urge all buyers to carefully review their title commitments before closing the deal.  Although residential buyers and sellers usually don’t hire attorneys to represent them in their deals, the advice of legal counsel may be very valuable.

It is often difficult for even experienced attorneys to understand all the poorly-written “legalese” in title commitments and policies.  For regular people, it can be daunting.  Too many buyers have taken title to properties without fully understanding title issues that can be found in commitments if carefully reviewed.  Because Esquire is attorney-owned and affiliated with the law firm of CPC Law, an attorney’s oversight and involvement in closings provides additional protection to all the parties in the deal.

Municipal liens are another title trap.  At Esquire, we order separate municipal lien searches for our closings.  This subset of a title search will review and find public records normally not found in the general title search.  Examples include unresolved building permits and code enforcement issues.

Real Estate Investors

Real estate investing should be a part of everyone’s wealth-building strategy.  Our firm is a member of Central Florida Realty Investors and represents investors throughout Florida in a variety of matters.  Our Founder and Managing Attorney, Charles Castellon, is also a real estate investor.

We understand investors and when we encounter challenges in real estate deals, we don’t say “that can’t be done.”  Instead, we ask “how can we do this?” while seeking legal and ethical solutions and encouraging win-win results.

Esquire Title Company is where hard deals are made easy.  We work with many real estate investors who bring us complex transactions to close.  Investor deals are rarely simple, “vanilla” closings.  Instead, they often use “transactional engineering” techniques to close their deals.

Many of our legal and title clients engage in such creative investing techniques.  Our investor clients practice wholesaling, buy & hold, flipping, foreclosures, bank-owned and short sale purchases, tax deeds and other strategies.  Additionally, Esquire closes deals involving seller-financing, “subject-to” mortgages, private (“hard-money”) lending, wrap-around mortgages, land trusts and lease options, among others.  We speak and understand the investor language.

Not all title companies have the skill sets and knowledge required to effectively handle these deals with so many “moving parts.”  In the toughest cases, we need to sketch out charts on a whiteboard to grasp some deals investors bring us.  For many title agencies, the reaction would be to run and hide.  Esquire welcomes the challenge to make the most complex deals close.  When there is no available legal and ethical way to do the job, however, we won’t cut corners and risk our license and policy claims to please anyone.

Sometimes deals simply can’t be done the way someone wants them to.  Before throwing in the towel, we’ll analyze, think, suggest ideas, consult with our affiliated attorney and underwriting counsel and do anything else within reason to find a way to close.

Short Sales

Among the hardest deals to close are “short sales.” A short sale is the sale of a property that is “upside down,” meaning more is owed on the mortgage than the market value.  During the very recent history foreclosure crisis and its aftermath, most of Esquire’s deals have been short sales.

Today, the short sale volume is dramatically down, mainly because of the market recovery with increased equity and the “thinning of the herd” in foreclosures.  That said, we continue to close short sales and there will likely be another spike in these deals during the next inevitable real estate market correction and economic downturn.

Short sales are never pleasant and easy.  They require our attorney negotiator to work with the mortgage lender to persuade them to approve a purchase contract for an amount that’s less than what the borrower owes.  There is enormous bureaucracy and “red tape” involved in dealing with lenders or servicing companies in short sale negotiations.

Even when a short sale eventually closes, the parties involved often suffer an array of negative emotions and frustrations along the way.  The lending industry was hopelessly unprepared for the foreclosure crisis they caused.  Nowhere is this reality more vivid than in the world of short sale processing.  The lenders and servicers are typically disorganized and often incompetent in handling short sale applications.

Our negotiators and short sale processors must collect many documents, including purchase contracts, borrowers’ financial records and others.  The phrase “herding cats” applies to short sales.  The process is inherently slow, stressful and frustrating even when things are going well.

The key phrase in short sale negotiations is “hardship.”  For the lender to accept their monetary loss, they will want to see that the borrower has suffered some serious hardship that made them unable to pay the mortgage.  Usually, hardship comes in the form of unemployment, business losses, medical trauma, divorce or some combination of these negative life events.

The borrower is required to write a “hardship letter” explaining what happened to them to convince the lender.  Esquire and its attorney will review the letter and advise the borrower on how to express their hardship most effectively to persuade the lender to approve the short sale.

When we work short sales without much borrower hardship, this creates new challenges, but the deal can usually still be closed.  A low-hardship, “strategic defaulter” will likely be required to bring money to the closing table as a contribution to get approved.

Sellers are stressed because they’re trying to avoid foreclosure and all its consequences. Buyers get frustrated waiting for approval and tying up their money in the deal.  Esquire doesn’t get paid until the deal closes.  If it doesn’t close, we don’t get paid.  When we do get paid, lenders usually slash our approved fees because they control the deal and they can.

In most short sales, the seller (borrower) doesn’t pay any fees or receive any proceeds.  All closing costs attributable to the “seller” are actually paid by the seller’s lender.  Because there’s not enough equity to pay the mortgage lender, the bank will go to great lengths to make sure no money is left on the table and none goes into the seller’s pocket.

An exception to the seller not collecting money is when the borrower is approved for some type of financial assistance or relocation money, commonly known as “cash for keys.”  Esquire will always pursue any available money sources for the seller, which can amount to several thousand dollars.

When there’s more than one mortgage, the deal gets harder.  In those cases, we need to obtain approval from the second (or more) lender(s).  the lender with the first priority mortgage position controls the deal in terms of who gets what.  They’ll decide how much may trickle down to junior mortgages as crumbs from the table.  If the junior lender refuses, they can block the deal because we need all mortgages to be satisfied to close.

Most important for the seller is to get certain protections in the terms of the short sale deal.  Lenders will issue a written short sale approval containing all the terms and restrictions surrounding their acceptance of the purchase money, which by definition, will not be enough to satisfy the mortgage debt.

The most important condition we seek for all our short-sellers is a deficiency waiver.  This is a legally-binding written promise from the lender to accept the sale proceeds as full satisfaction of the mortgage debt while waiving all rights to sue the borrower later for their shortfall, known as the “deficiency.”

Without this promise, the lender can take the money and maintain the right to sue the borrower later for a deficiency action.  Our attorney carefully reviews all lender short sale acceptance letters to make sure the necessary borrower protections are included.  If they’re not, we’ll go to bat to make every effort to convince the lender to add the necessary terms at the risk of losing the deal.

Ultimately, it’s up to the seller to decide whether to close without certain protections and they often make a calculated risk to move forward without a deficiency waiver.  Fortunately, that’s a very rare scenario because Esquire has a very high success rate in obtaining deficiency waivers.

Many confuse the deficiency with IRS tax liability to the borrower.  When the lender accepts a short sale, they’ll very likely issue an IRS form called a “1099-C” to cancel the part of the mortgage debt the lender didn’t get paid back.  It’s crucial for all short sale sellers to get sound tax advice from a CPA regarding this 1099.

The deficiency waiver will not address the tax issue.  Unfortunately, the IRS considers cancelled mortgage debt to be “income” taxable at the borrowers tax bracket rate.  Fortunately, there are tax-planning strategies available to seek relief from this “phantom income” liability and that’s why consulting with a knowledgeable CPA is so important.  It’s nearly impossible that a lender would consider waiving its right to file the 1099 as a condition of the deal.

Sometimes lenders require borrowers to make a financial contribution.  This “skin in the game” is not too common and most frequently occurs when the borrower is doing relatively well and has little hardship.  This is often considered a “strategic default.”

When these contributions are required as a condition of the deal, its usually in the form of an unsecured, zero-interest loan to the lender.  Borrower contributions are almost always in an amount far less than the difference between what the lender collects and what is owed on the mortgage.

Esquire and CPC Law are battle-tested from many foreclosures being resolved via short sales throughout the foreclosure crisis.  We’ve effectively handled hundreds of files while helping distressed borrowers avoid foreclosure and all the resulting consequences including deficiency judgments and credit rating disaster.

One of the main reasons to consider a short sale as a foreclosure solution is the lesser credit impact that will affect the borrower following the short sale compared to a foreclosure judgment and court auction.  Many of our clients are an inspiration in how well they’ve rebounded after a short sale.  The lesser credit damage can often be repaired so they may qualify for a new mortgage to buy the next home within about two years of the short sale.

For all your real estate closing and title insurance needs, call Esquire Title Company, “hard deals made easy.”

Contact CPC Law at (407) 851-0201 and speak to an attorney now!

“Great multi-services law firm. Everyone is very professional and helpful. Fees are reasonable and affordable. I highly recommend this law firm to anyone in needs of legal services and or Title and Closing services.”

Alain Wichner

Orlando, FL

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