What is Mello-Roos ??

Hey friends, on a daily basis I get asked, ” what is Mello Roos ?? How do I explain this to my clients ? So here I go blogging about it so you have the resources needed.

The Truth About Mello-Roos

The Real Benefits of Mello-Roos. As always, today’s families recognize the importance of living in a community that’s as desirable as their home itself. Mello- Roos enables critical community facilities to be provided whenever they’re needed at a lower cost ultimately to homeown- ers. By doing so, Mello-Roos ensures a higher quality of life for every family in that community. Perhaps most importantly of all, Mello-Roos helps preserve the value of your new home investment.

Where did Mello-Roos Come From?

When Proposition 13 passed in 1978, it severely limited the ability of local governments to use property taxes to construct public facilities and services. As a result, Californians were forced to find new ways to fund public improvements in their respective locales. The Mello-Roos Community Facilities Act of 1982 was co-authored by Senator Henry Mello of the Mon- terey area and Los Angeles assemblyman Mike Roos. Enacted by the California legislature, the Act enabled “Community Facilities Districts” (CFD’s) to be established by local government agencies as a means of obtaining this crucial community funding. Today the colloquial name for the Facilities Act of 1982 is simply “Mello-Roos.”

What Public Facilities are Funded by Mello-Roos?

School districts are the most common beneficiaries. Since state funds are not available to provide the quality of facilities nec- essary in every community in California, Mello-Roos makes the acquisition of timely financing possible. In addition, Mello- Roos can provide financing for other vital community needs. These needs include the construction and maintenance of pub- lic roads, traffic light systems, storm sewers, water mains, police stations, fire stations, ambulance services, public libraries, recreational parks, museums and cultural facilities.

How is Community Funding Provided?

Let’s say, for example, that plans for a new school are approved in your Community Facilities District. To finance the school, tax exempt municipal bonds are issued. These public bonds are repaid (or secured) over an extended time through the levy of a special tax (Mello-Roos) on properties that benefit from the facility. This tax is usually added to the annual prop- erty tax bills (over a 20-25 year period) of residences within the CFD. Commercial and industrial property owners are also subject to Mello-Roos. All proceeds raised from Mello-Roos assessment must be used exclusively to finance the specific public facilities and/or services that were authorized in your CFD.

How Much Will I Be Assessed?

This will vary from one CFD to another. Typically, an adopted formula that relates to the size of the home (square footage or lot size) is used to determine the amount of an individual assessment. In general, the special taxes and assessments do not exceed 1% to 1.5% of the market value of new homes. Moreover, the total amount of all annual taxes (including property tax) usually does not exceed 2% to 2.5% of the home’s market value.

Will My Mello-Roos Tax Increase?

It can. However, this special tax can increase only at a maximum rate of 2% per year over a 25 years period. On the other hand, it’s possible that this tax will decrease, should state or other funds become available that could be used to reduce exist- ing bond indebtedness, or be used to construct new facilities in lieu of additional bond sales.

Can I Choose How to Pay for Mello-Roos?

Yes. As already mentioned, the special assessment can be added to your property tax bills until your portion of the tax is paid off. A schedule of maximum special tax payments over a period of 25 years is available to homeowners prior to the close of escrow. Those who purchase a new home also have the option to pay for their Mello-Roos tax in it’s entirety at the time they buy. However, because statistics indicate that the average homeowner in California moves every 7 years, it’s often prudent to spread the payments over time.

Why Can’t Builders Bear the Cost of these Facilities?

They can. But ultimately, the builder must recover these considerable costs in the form of higher home prices. Commercial construction loans acquired by builders typically incur higher rates of interest than CFD financing, which accrues at signifi- cantly lower rates.

Mello-Roos Makes Sense

Buying a home is the most important decision most of us will ever make. Mello-Roos offers the security of knowing that your community will continue to prosper and grow in ways that are most beneficial to it’s residents.

Blessing , hope you enjoyed and please share, subscribe, and connect.

Ryan Raphael

What Is In A Name ?

Hi, here is a topic that some real estate friends have asked me to blog about. 90% of liens or issues show up from the SI. Here is a good breakdown below to educate yourself and your consumers on how important their name really is 🙂

What’s in a name?

When a title company seeks to uncover matters affecting title to real property, the answer is, “Quite a bit”. Statements of Information provide title companies with the information they need to distinguish the buyers and sellers of real property from others with similar names. After identifying the true buyers and sellers, title companies may disregard the judgments, liens or other matters on the public records under similar names. To help you better understand this sensitive subject, the California Land Title Association has answered some of the questions most commonly asked about Statements of Information.

What is a Statement of Information?

A Statement of Information is a form routinely requested from the buyer, seller and borrower in a transaction where title insurance is sought. The completed form provides the title company with information needed to adequately examine documents so as to disregard matters which do not affect the property to be insured, matters which actually apply to some other person.

What does a Statement of Information Do?

Everyday documents affecting real property- liens, court decrees, bankruptcies, etc.–are recorded. Whenever a title company uncovers a recorded document in which the name is the same or similar to that of the buyer, seller of borrower in a title transaction, the title company must ask, “Does this document affect the parties we are insuring?” Because, if it does, it affects title to the property and would, therefore be listed as an exception from coverage under the title policy.
A properly completed Statement of Information will allow the title company to differentiate between parties with the same or similar names when searching documents recorded by name. This protects all parties involved and allows the title company to competently carry out its duties without unnecessary delay.

What types of information are requested in a Statement of Information?

The information requested is personal in nature, but not unnecessarily so. The information requested is essential to avoid delays in closing the transaction.
You will be asked to provide full name, social security number, year of birth, birthplace, and information on citizen-ship. If you are married, you will be asked the date and place of your marriage. Residence and employment information will be requested, as will information regarding previous marriages if you are divorced.

Will the information I supply be kept confidential?

The information you supply is completely confidential and only for the title company to use in completing the search of records necessary before a policy of title insurance can be issued.

What happens if a buyer, seller, or borrower fails to provide the requested Statement of Information?

At best, failure to provide the requested Statement of Information will hinder the search and examination capabilities of the title company, causing the delay in the production of your title policy. At worst, failure to provide the information requested could prohibit the close of your escrow. Without a Statement of Information, it would be necessary for the title company to list as exceptions from coverage judgments, liens or other matters which may affect the property to be insured. Such exceptions would be unacceptable to most lenders, whose interest must also be insured.

In Conclusion

Title companies make every attempt in issuing a policy of title insurance to identify known risks affecting your property and to efficiently and correctly transfer title so as to protect your interests as a homebuyer. By properly completing a Statement of Information, you allow the title company to provide the service you need with the assurance of confidentiality.

I sincerely hope you enjoyed this blog and learned a thing or two about how important your name is. Connect with me @

http://www.facebook.com/fidelityryan
http://www.ryanraphael.com
951-870-0200

Why is My Lender Requiring Title Insurance ??

Why Lenders Require Title Insurance when Refinancing

Now is the time to refinance if you simply have some equity in your home. With rates as low as they are, most people still don’t understand how low rates truly are ! We are talking Historic Low ! I still am always asked Why will I need Title Insurance ? Now I do a Decent amount of Refi’s and will tell you there is no way around it however it’s in all parties best interest. Please enjoy this blog below.

Lower interest rates have motivated you to refinance your home loan. The lower rate may save you a tremendous amount of money over the life of the loan, but you should also expect to pay the lender the typical closing costs associated with any new loan, including service fees, points, title insurance protection and other expenses.
Why do I need to purchase a new title insurance policy on a refinanced loan?
To the lender, a refinance loan is no different than any other home loan. So, your lender will want to insure that its new loan is protected by title insurance, just as the original lender required. Therefore, when you refinance you are buying a title policy to protect your lender.
Why does a Lender need title insurance?
Most lenders generate loans and then immediately sell those loans to secondary market investors, such as FannieMae. FannieMae, in order to protect its security interest in the loan, requires title insurance coverage. Even those lenders who keep original loans in their portfolio are wise to get a lender’s policy to protect its investment against title related defects.
When I purchased my home, didn’t I also buy a lender’s policy?
Perhaps. Who pays for the lender’s policy on a purchase loan varies regionally and by the terms of individual contracts. However, even if you did buy a lender’s policy when you purchased your home, the lender’s policy remains in force only during the life of the loan that was insured. If you refinance, the old loan is paid off ( the “life” of the loan expires) and a new loan is issued for with the lender will require a new title insurance policy.
When you bought your home, you purchased a homeowner’s title policy. The homeowner’s policy stays in force as long as you or your heirs own the home. When you refinance, your lender will often require that you purchase a new lender’s policy to protect its new security interest in the property. Thus, you are buying a policy to protect your lender, not a new homeowner’s policy.
What could possibly have happened since I purchased my home which warrants a new lender’s policy?
Since the time that the original loan was made, you may have taken out a second trust deed on the house or had mechanic’s liens, child support liens or legal judgments recorded against you – events that could result in serious financial losses to an unprotected lender. Regardless if it has been only 6 months or less since you purchased or refinanced your home, a myriad of title defects could have occurred. While you may not have any title defects, many homeowners do. The only way for a lender to adequately protect itself is to get a new lender’s policy each time you purchase or refinance your home.
Are there any discounts available for title insurance on a refinance transaction?
Yes. Title companies offer a refinance transaction discount or a short term rate. Discounts may also be available if you use the same lender for your refinance loan and your original loan. Be sure to ask your title company how it can save you money.

Understanding Living Trust

Understanding Living Trusts

What taxes can I avoid by putting my property in a Trust?
Married persons can usually exempt a significant part of their assets from taxation and may postpone taxes after the first of them to die passes. You should check with your attorney or accountant be- fore taking any action.

Can I homestead property which is held in a Trust?
Yes, if the property otherwise qualifies.

Can a Trustee borrow money against the prop- erty?
A Trustee can take any action permitted by the terms of the Trust, and the typical Trust Agree- ment does give the Trustee the authority to borrow and encumber real property. However, not all lend- ers will lend on a property held in trust, so check with your lender first.

Can Someone else hold title for me “in trust?”
Some people who do not wish their names to show as titleholders make private arrangements with a third party Trustee; however, such an arrangement may be illegal, and is always inadvisable because the Trustee of record is the only one who is em- powered to convey, or borrow against, the prop- erty, and a Title Insurer cannot protect you from a Trustee who is not acting in accordance with your wishes despite the existence of a private agreement you have with the Trustee.

Understanding Living Trusts
Estate planners often recommend “Living Trusts” as a viable option when contemplating the manner in which to hold title to real property. When a property is held in a Living Trust, title companies have particular requirements to facilitate the transaction. While not comprehensive, following are answers to many commonly asked questions. If you have questions that are not answered below, your title company representative may be able to assist you, however, one may wish to seek legal counsel.

Who are the parties to a Trust?
A typical trust is the Family Trust in which the Husband and Wife are the Trustees and, with their children, the Beneficiaries. Those who establish the trust and transfer their property into it are known as Trustors or Settlors. The settlor’s usually appoint themselves as Trustees and they are the primary beneficiaries during their lifetime. After their passing, their children and grandchildren usually become the primary beneficiaries if the trust is to survive, or the beneficiaries receive distributions directly from the trust if it is to close out.

What is a Living Trust?
Sometimes called an Inter-vivos Trust, the Living Trust is created during the lifetime of the Settlors (as opposed to being created by their Wills after death) and usually terminates after they die and the body of the Trust is distributed to their beneficiaries.

Can a Trust hold title to Real Property?
No. The Trustee holds the property on behalf of the Trust.

Is a Trust the best way to hold my property?
Only your attorney or accountant can answer the question; some common reasons for holding property in a Trust are to minimize or postpone death taxes, to avoid a time consuming probate, and to shield property from attack by certain unsecured creditors.

Words Of Encouragement

The results you get don’t come from the situation. The results you achieve are determined by what you choose to focus upon and what you choose to do.

From the very same set of circumstances, two different people can achieve two vastly different results. The outcome is not based on what they’re given, but on what they do with it.

If the results you’re getting are not the results you desire, stop looking for someone or something to blame.
Start looking for the possibilities that you have not yet considered.

Make your most positive and compelling purpose the filter through which you view everything that happens. That will cause outstanding, powerful possibilities to pop into view.

The world around you is constantly changing. There is always a way to harness the energy of the ever-changing landscape to suit your purpose.

Look calmly and confidently at the situation in which you find yourself. Then step gratefully forward, and make something beautiful, valuable and meaningful out of it all.

Ralph Marston

Common Title Obstacles

Hi friends, here are some key components we are seeing in the Title Unit that are causing a big delay and lots of obstacles. If you are experiencing some of these issues call me.

Common Title Obstacles –
The following items require added clearance and processing time for escrow and title.

Avoid delays by providing as much information as you can as soon as possible.

• Bankruptcies
• Probates
• Foreclosures
• Establishing Fact of Death-Joint Tenancy
• Use of, Proper Execution of Power of Attorney
• Family Trust
• Business Trust
• Recent Construction
• Physical Inspection Findings-Encroachments, Off-Record Easements
• Clearing Liens, Judgments
• Clearing Child/Spousal Support Liens
• Proper Execution of Documents
• Proper Jurats, Notary Seals
• Transfers/Loans Involving Corporations/Partnerships
• Last Minute Changes in Buyers
• Last Minute Changes in Coverage

Hope you enjoy this Fidelity Title Blog. Visit me at http://www.ryanraphael.com or http://www.facebook.com/fidelityryan

California Homeowner Bill of Rights Signed Into Law

Hey everyone, This is some pretty important information. Hope you enjoy

California Attorney General Kamala Harris announced Wednesday that Governor Edmund G. Brown signed two provisions of the much-debated Homeowner Bill of Rights into law.

The Homeowner Bill of Rights so far consists of a series of related bills containing provisions that prohibit certain practices by lenders that have been attributed to the state’s foreclosure crisis. Chief among the banned practices are robo-signing (signing of fraudulent mortgage documents without review) and dual-track foreclosure (starting foreclosure proceedings while the homeowner is in negotiations to save the home). The bill imposes civil penalties on perpetrators of these activities. In addition, it guarantees struggling homeowners a single point of contact at their lender who has knowledge of their loan and direct access to decision makers.
“Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner,” said Brown. “These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite.”
The laws will go into effect at the start of 2013. Borrowers can access courts to enforce their rights under the legislation.
The Homeowner Bill of Rights also contains a number of bills currently outside of the conference committee process. These other bills enhance law enforcement responses to mortgage and foreclosure-related crime. In addition, some bills are designed to help communities fight neighborhood blight resulting from foreclosures and provide enhanced protection for tenants in foreclosed homes.
The bill, unveiled by Harris in February, builds upon reforms negotiated in the national mortgage settlement between leading lenders and 49 states. Harris secured up to $18 billion for California homeowners in the agreement, some of which was used to establish a Mortgage Fraud Strike Force intended to investigate crime and fraud associate with mortgages and foreclosures.
“The California Homeowner Bill of Rights will give struggling homeowners a fighting shot to keep their home,” said Harris. “This legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community, and the housing market as a whole.”

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