Title Issues with Reverse Mortgages, with Kevin Sayles of Lawyers Title

0:02 Welcome to the Reverse Mortgage Podcast. Most commonly we have originators I interview or management in reverse mortgage companies. But the goal of this podcast to help us raise our professional standards and better serve our customers whether be referral sources or borrowers. And one of the key hiccups that many originators fall into is really not understanding the title process and using tools available to help prevent problems before they become problems. We're excited to have here a person who helped me get really launched into my probate business, Kevin sells. He's with Lawyers Title here in Southern California. He's a title expert. I would see him regularly at the court giving continuing ed classes to attorneys on title issues. So he definitely is an expert in the field. Kevin, thank you for joining us today.

0:42 Oh, thank you for having me. Glad to be here. So reverse you know people think about reverse mortgages as being somehow separated from title issues, but really it's no different I don't think than any other loan and or any other real estate transaction where you can't close a deal unless you know who you're working with and can document, correct?

1:00 Absolutely correct. So many times people think that it's so different because it's a reverse mortgage or the regular rules don't apply, but a reverse mortgage is a mortgage like any other mortgage. So there's some things we can assume, but it's better to not assume. It's better to get the documentation that you need to have and to proceed with knowledge rather than you know proceeding blind. So absolutely I say just like any other mortgage that you want to know what you're getting into before you get started, same thing with a reverse.

1:28 I know I got a phone call once from a family that had a wanted to do a reverse mortgage and then discovered what now they need the money. They're in the process for a few months. They did the paperwork. They took their time. And then they discovered

1:42 [laughter] because nobody looked that they had a title issue. Somebody was on title and wasn't getting it off properly. You must get those phone calls from all types of loans I'm sure as well as all types of real estate but including reverse mortgage as well, correct?

1:55 Yeah, and it seems like with the reverse mortgage people are more surprised because, you know, it's grandma or mom's home or something like that. Maybe they're, you know, they've gotten along in years now, and everyone's always known that everything was fine. You know, it's always been all right. Everything's okay. But, that seems to be the time when the surprises happen because they just assume everything is fine. But, an issue I was looking at just this morning. This client of mine does do all the due diligence up front. Matter of fact, I think you know him, but he does all the due diligence up front. He researches and makes sure everything's clear. And on this one, what we found is they had a loan back in 2003. That loan has never been reconveyed from the property. In 2007, they obtained the reverse mortgage. And we all know reverse mortgages are first position. It's an FHA loan. Everything should have been cleared from that property when they did that reverse mortgage. But, unfortunately, the loan was not reconveyed. So, extra work is going to have to happen. It's good that he got he's knowledgeable of about this up front because extra work is going to have to happen. You know, 2007 is a long time ago. That reverse mortgage balance has gone up and up and up, and I think it may be something where they don't know if there's enough equity and that sort of thing. But, the fact is if he hadn't got on it early, this could be a surprise that could delay things while you're in escrow or trying to sell the property.

3:13 Now, one of the key things you offer is two different tools that I take advantage of as having a relationship with you. I imagine you make it available to other people who have such a relationship with you. But, it's not so exclusive the way I have it. So, and that and that's something you sell. Number one is you have a program that really allows me to check maybe for potential issues by looking at the old deeds and the chain of title called I think it's title 24/7. Talk a bit about how that tool works and how you provide that for certain customers and what kind of asset that is for people like me.

3:44 Absolutely. I'm glad you brought that up. So, TitlePro247, it is an online system. You log in with have a name. It's just bookmarked on my browser. And I'm on it, you know, every single day. So, thank you for correcting me on the name, but for those of you watching, it's just cuz I just I clicked a little What is it What is it called? Home TitlePro247. Yeah, that's the name. Okay, sorry. I didn't really know.

4:05 This is the same system we've used. I mean, I think I've been using this system since 1999, literally. And it used to be called Title Pro File, then recently they changed to TitlePro247. Essentially, it is online data where you can get access to a property. It has comps. It'll tell you it has a transaction history, so it can tell you the chain. Now, if people have owned the property for a very long time, it won't have any data older than the mid-1990s. But for stuff that's more recent, it's going to It's going to have a transaction history, so you can see when they obtained loans, when they sold the property, when they bought the property, that kind of thing. And it's a great tool. I always tell people this way, this is a great tool to get a general idea of information going on the property. But when it comes time to sign on the dotted line, when it's time to put the money up or, you know, sign a contract, then I always say get the information from our customer service department because the Title Pro account is generally correct, but when there's a lot going on with the property, a lot of deeds or mistakes or partial interest transfers, you may not be able to recognize that there's something going on that only partially transferred a property and didn't transfer the whole property. So, that's where I always say, then you want to go through our customer service department, which is also available to anyone that, you know, calls or emails between 8:00 and 5:00.

5:24 Go to customer service department. And one thing I'd like to note, people often will call me and say, "Hey Kevin, can you give me this property information? Can you look and see if this property's in foreclosure? Or can you give me this property profile?" And as title reps, I've been working in title since '99. Prior to that, I worked at a bank. Title reps, we don't have any information like that at our I we have Title Pro, but that's the same thing you have. My Title Pro account is exactly the same as yours, Bill. So, what I always tell people is you can order it from me. It's just going to take longer cuz then I just turn around and order it directly from customer service. But, our customer service reps, they have one job. Their one job is to take phone calls and emails for property information. If you want to know if the property's in default, if you know, if it has a reverse mortgage on it, that kind of thing. That's their sole job is to take those phone calls and those emails. So, I like to direct my clients directly to customer service. They don't have to go through me as a as a middle man, so to speak.

6:21 Yeah, and I'm the same way. You know, I love I've had attorneys say to me, you know, if you give me a customer service number, your title company, I'd be glad to call them directly. I said, "No, I want you to reach out to me. I'm glad to play the Kevin sells role for attorneys or paralegals or fiduciaries or people who need the deeds because it literally just takes me a split second. I can faster than I can call you and you pick up your phone, but I can go into Title Pro and put the address in and see the history and the and the deeds, the chain of title. If it's recent enough Now, some of the stuff is so old that you have to go to customer service. There's a little form you click on, and that request goes out automatically. As fast as Kevin can do it, I can do it. And so, I say to my attorneys, you know, feel free to use me. And if you want to set the title account, I'd be glad to make an introduction. You guys can set up directly, but it's not I'm glad to pull profiles all day long because I mean, somebody's calling me about a real estate problem, and if I can help solve that. So, for me, I look at it and I look at the last transaction, and if it seems to be from somebody unrelated, no listing last name, no party on the same name, to a new party, and it has title insurance on it, right? It's not some quick claim deed or some sort of odd deed, then I feel pretty confident that we can move to the next phase and order a prelim when necessary. If there's any questions, now you do I have to go back to my customer and say, "Hey, there's an issue here. You I see you had four people, then two people. I've sent these to Kevin once a while.

7:45 And I'm not no not sure what to make of it. And the title company comes back a few days later and says, well, there is no answer as to the court because there's no right answer. There's a There's a dispute and there's a grounds for dispute. And so that's a case where, you know, I've served my attorney. So, I get TitlePro247, definitely reach out to Kevin. It has other features. I guess you can also check if your customer owns multiple properties, if they have you know, entities they use. There's a lot of good research. Now you know, I've never seen any training class on it. I just on my own have learned it. Maybe I should offer the training for you, Kevin. I can offer your clients on how to use it, first ways to generate business.

8:24 Yeah, and then and then we'll send you a check for your training fees. That all sounds great. I'd do it I'd do it for free. Now, that's the first tool that you'll offer that I think in and other, you know, in full disclosure, other title companies have a similar product and they're somewhat similar and they kind of all do way. But this is a tool that any real estate professional should have. And I think if you're a probate attorney or if you're a paralegal who does this work or, you know, have a Realtor® do it for you on your team, I'm glad to fill that role. The other tool is the actual prelim. Now, the preliminary title reports cost your company work, time, effort, energy. So, we don't want to order them frivolously. So, talk about what's the threshold at what point it's appropriate to order a full prelim, do you think?

9:04 I tell clients that you order a prelim when your client has signed on the dotted line. So, for instance, if you take a listing or if you've signed a contract with them, let's say you're the buyer and you've signed a contract with them, then at that point you order prelim cuz they've already signed committing to, you know, work with you or sell the property. If it's a situation where a probate is necessary or some litigation is necessary, once they've signed up with the attorney and they've retained that attorney, I would order it immediately. Especially with any type of litigation or probate, it's important because then the attorney has that prelim ahead of time to know am I suing all of the parties that I need to sue or are there any other owners? Is there any other ownership? I've seen where you know, attorneys have gone to court, have gotten an order from the court, but they didn't know the exact circumstances under title when they did it because they didn't clean up all the issues that needed to be cleaned up. So, it's very important that when they when they start that process. So, if they're starting a court procedure and they have their attorney and they're starting that, if they've signed on the dotted line, and in the instance of a loan, usually when lenders do a loan, they send out disclosures, they sign those disclosures kind of approving, "Yeah, I'm going with these fees, etc." And then you're about to start running your processing, ordering appraisals, etc. At that point, that's when we would want to do the prelim because like you said, you know, prelims I don't know the exact dollar amount, but I've heard many times it's between 250 and 350. I think now with technology, sometimes we can get it a little bit cheaper on what we call the bunnies, the easy ones, but still it's you know, in the hundreds of dollars to get a prelim done.

10:38 So, it's important for us to know that we've got some commitment from the clients, you know, before we're starting that process. So, for an originator, I would always say best practice would be check the profile before you even pre-qualify the customer to make sure you're pre-qualifying the right person. And then before you start opening your loan, at the point you have maybe signed application and maybe whatever approval to order the appraisal or the preliminary title report right away. And it takes a day or two, but now you really know who you have and what and those issues get worked out. I think the other The other part is for those originators in reverse mortgages who are looking to work with estate planners, who are looking to work with attorneys, this is what to I think step up your game and provide value to them because if you're helping catch these problems early, then you're also giving the attorney a full solution package. You're giving them the last deed, you give them a title report, you give them the actual legal description of the property, which is important for any documents they may have. And so, this is all part about stepping up your game from just being a I don't know, there's a title problem to maybe not solve the problem, but you're handing out the tools and the parts needed to solve the problem to the right party, and that could be either the title officer, if you know those issues, or it could be an attorney if that's what's required.

11:46 Yeah, absolutely. So, obviously, you know, even with the best intentions, we open, we get a profile that has I mean, I pull my title report, it has maybe some liens on there, maybe some tax liens, there's some credit things, but you know, the client says, "Oh, I paid these things off a long time ago." and you take their word for it, you get started. I know you have a saying that if paper put a lien on, paper takes it off.

12:10 Yeah. What does that mean? So, I've had people that say, "Oh, yeah, we saw that on the title report, but we didn't think it we didn't think we had to worry about it." And it's like, yeah, well, we report it for a reason. Th- This is the funny thing, Bill. No one would ever order a home inspection. You're buying a property. No one would do this. No one would order a home inspection and then say, "I'm not going to look at it." Or, "Yeah, it says a leak, but I'm not going to, you know, I'm not I'm going to pretend like that leak is not there." It's one thing to say it's there's a leak and I know I'm going to fix it, but to say, "It says there's a leak, but I'm just going to pretend like it's not there." Or, "It says there's termite damage, I'm going to pretend like that damage is not there." What they What they fail to realize is the home inspection is the physical condition of the property and the title report is the ownership condition of the property. So, if we show a lien or a loan, we're saying this lien holder or this loan has a claim to this property.

13:03 Right. And so, I've had people say, "Oh, yeah, we saw that loan, but that loan was paid off decades ago." You know, now you saw that loan 60 days ago, 30 days ago when we did our title report. Now, we're the day before closing, and it's coming up as a problem, and you're telling me that you saw it, and you didn't think it was an issue. So, it's very important to look at those things and know. And so, the reason I say that, if something shows up on our title report, a piece of paper had to be sent down to the county recorder's office, and they had to pay a fee to record that. That's how it shows up there. And naturally, if it took a piece of paper to put it there, it's going to take a physical piece of paper to remove it. The document has to be removed. And so, you know, an another thing that kind of goes along with this that I think is a is a is a good analogy. When let's go back to my homeowner my home inspection. The home inspector goes in and says, "Yeah, there's you know, black mold in the in the attic, or there's a hole in the roof, or you know, this faucet was leaking." I don't ever expect that home inspector fix the problem. He doesn't come out of the house and say, "Yeah, there was a hole in the ceiling, so I went and got some plywood, patched it up, you know, put a new roof covering on it, and the roof is all taken care of now." Or the faucet was leaking, so I went and put a new faucet. That's not what he does. He reports the issue. And that's kind of what our title report is. We report the issue. Then the escrow officer's job is they come in and say, "Oh, there is this lien from the city. Let me call the city and order a payoff, or order what needs to be taken care of." "Oh, there's this loan from, you know, this old loan. Let me call that lender and order a payoff, or order what you know, a reconveyance to get that removed." That's a key piece of the puzzle. I think for some people it's confusing because in other states, they don't have escrow and title. It's one person that does the job of both. It may be an attorney, it may be just a closing agent, but it's one person that does the job of both. In California, particularly southern California, we separate the title officer's role and the escrow officer's role. So, we report the information, then the escrow officer says, "Oh, there's a loan here. Let me order a payoff on this old loan."

15:04 Well, and then, you know, it's normal that a preliminary title report has liens that we expect, right? There's a first mortgage, maybe a second mortgage.

15:13 Property taxes. Property taxes that are due, maybe they're paid, maybe they're not paid, maybe they're paid late, maybe they're prepaid, but they still show as a lien, and you have to answer the question, "What do we do with it?" there's different, you know, easements and things that are normal for property like that they have to look at. And then there's the same things. There's easements that are not normal. There's tax liens that are not normal. There's loans that are not normal.

15:32 Yeah. And like I say, this is the job that in my mind of the escrow officer is to look at that. And you bring up the right point. You know, when you open up escrow, you have, you know, 59 days to work on it peacefully. If you don't find out till the day before you're recording, it's a nightmare. And that's why you want to look at that up front. Now, you know, I know that I'm not very good at physical inspections. One of the things I've learned is I created my own little artificial intelligence prompt that will upload one and make a list of the most important issues and go out and get quotes and at least give me a summary that assists me in being more effective at reviewing these things. Do you see this being done at title companies? I've seen some title companies that offer like a I don't know if it's yours or somebody else's like a like an AI summary of the prelim. Of course, you know, it's not perfect. Still you should look at yourself. But it seems to me that if at a minimum you should have a list of all the liens and is this normal or abnormal or normally handled by escrow or not? Seems to me it might help focus your attention on what's important.

16:35 Bill, are you reading my calendar or something? Because my meeting after we get off this call, the meeting that I have coming up here is about that particularly. We have a prelim review, an AI prelim review. In addition to that one, another manager at our company created his own. And the meeting I have today is to talk to them to say we've got to refine this because like you said, it's not perfect. Right now, the AI review basically comes out saying the exact same thing the prelim said. Right. So to me it's like, okay, I got a prelim and then now I have AI stating the same exact thing. So our meeting, this is so crazy that you brought this up because our meeting after this call with you, I have a meeting to talk with the people in my office, the tech people that work that to say, how can we refine this to actually give beneficial information. Let's not just regurgitate the prelim. Let's kind of summarize it in a more concise fashion and get it So yes, we have that. We're working on it. It needs to be refined. I think in the future it will be a lot better. Just like they're getting better with AI videos where, you know, at first when you see AI videos, you could see the glitching, you could see the mannerisms that aren't good, but now they're getting better where it's starting to look like, oh, I think that guy really said that because you can't really tell it's a fake video. I think we're going to see improvements in the AI over time and that in the future the prelim will review will give an act it'll spit out a nice accurate thing that says, "These are the things to worry about." and along those lines I thought of something that I want to share with you.

17:58 I had a I have a Well, we just closed it, so I had a transaction a month ago and this gentleman bought the property. I don't remember the exact year, but let's say he bought it 3 years ago. Bought it, got title insurance. That means when he bought it should be free and clear of all liens. There should be nothing else on the property. Yet when we do our prelim, it shows a lien from the city. It's called notice of pendency. It's a pending lien from the city, meaning there was some violation or some problem or something from back in 2008. Obviously, that's long before he bought the property. Obviously, it should have been cleared when he bought it, but it wasn't. And so long story short, we do our title report and it comes up. And so we worked out a way to get it removed. It wasn't very large. It was like 800 bucks. Anyway, got it taken care of. It got paid out of our sale transaction. It got paid out of out of our transaction. That's something that should have been taken care of when he bought it, but it popped up. Now, if that had been several thousand, we wouldn't have closed the transaction. They would have had to deal with something. They would have probably had to file a title claim with their title company, etc. Etc. Because it was a smaller amount, we were able to work it out. But here's my point. After that file closed, about 2 weeks ago, I had a phone call with someone and he's asking questions saying, "I don't think I need title insurance. I know these sellers. We've come to an agreement. I don't need title insurance. They can just quick claim the property to me.

19:16 And, you know, not to really try to convince him cuz if people want to jump into a pit on their own, you know, I'll tell them why they shouldn't, but if they want to jump in the pit, I'm not going to fight for it more than they're going to fight for it. So, but what I explained to him is how that scenario worked. And then it instantly he realized. He goes, "Oh, I see. This guy bought the property. It should have been free and clear after he bought it. Now he's selling it should be free and clear of all liens when he's selling it." But it turns out there is a mistake and something was there. So, I think that was a good example kind of what we've been talking about.

19:47 Well, who knows if the guy in the meantime got divorced, married, you know, his wife that he that he married he didn't unbeknownst to him had some lien that somehow missed the last time around. There's a million possible scenarios that could cause some immediate risk. And if you have a loan, the lender's going to require title insurance. You can say you don't need it all you want, but the lender's not going to fund the loan without it, then it doesn't matter what you want, you're going to get title insurance. That's just how that works. So. Now, I you know, I've seen in purchases I haven't you know, I don't do mortgages myself, but I imagine the same thing that with the proliferation of solar particularly here in California, PACE loans and things like that these liens end up becoming a challenge down the road. There's a lease, who's assuming the lease, they're paying off the lease. It was paid off, it doesn't show you know, it was paid off and not reconveyed. The social's on. Do you see these kind of issues coming up more often? And what's the common solutions for these? Yeah.

20:42 Bill, I'm telling you are like a mind reader because I have this file we were just you know, we were just working on Friday. And there's a solar UCC filing, which is the gives the solar company the right to come take the panels. But there's also a recorded solar producer contract. And so, that's just kind of notifying the world that hey, we have a contract here to produce solar, blah. And the law firm and the solar producer contract it says right on the document this is not a monetary lien. And they do that I think for the for the theory of letting the world know we're not trying to be in front of your loan, we're not trying to have priority lien position, we're just notifying the world that we have this solar contract on this property. But lenders don't necessarily like it. I don't know where that falls in Fannie Freddie guidelines or where that falls in FHA guidelines. But I've noticed most lenders don't like that to be on the property. They want that removed, they want their loan to not be subject to that solar producer contract. And so the it's this is the bottom line is the law firm, this is a probate sale, and the law firm was like, "Nope, that does not have to be shown. The title company should remove it, blah." Ended up having a conversation with the law firm. I said, "Listen, here's the way it works for all title matters. As a title company, we're just the messenger, right? If the postman delivers mail to my house and it says you have a lien, I don't go punch the post the mail carrier in the nose. He didn't give me the lien, he's just bringing the mail.

22:12 That's how we are as a title company. We don't determine what liens need to be paid off. Any buyer can buy a property subject to anything. The only thing we won't insure is we won't insure against a lis pendens which is a lawsuit. If there's a current lawsuit, we won't insure because that lawsuit may remove the seller's ability to sell the property, may remove their ownership in the property. So it's kind of like you can't insure around that. Any other lien, if the seller has a IRS lien, a judgment, a tax lien, a city lien, a loan, 10 loans, any other lien on the property, we can insure the buyer that they're getting the property subject to those liens. All we require is they have to acknowledge that they know they're buying the property with those liens on it. Usually escrow drafts an escrow instruction. It's where the buyer acknowledges that I know I'm buying this property subject to whatever lien and blah. So, my point with that is this, we don't dictate that the solar has to be taken care of. Now, I know for a fact 90% of the lenders are going to require it to be taken care of, but we don't dictate it. So, what I explained to the attorney is if buyer and seller want it there, we're fine. Leave it there. No problem.

23:21 Right. If buyer and seller do not want it there, then we have to follow their instruction. As a title company, we follow instructions. Whatever instruction escrow gives us, whatever instruction lender gives us, whatever instruction buyer or seller give us, we have to follow those instructions. So, if they want that item removed, we have to see that it's removed before we close. If they say, "Hey, I'm okay. Leave that solar on the property." Then we're okay closing that. So, once that was explained to the attorney, they realized, "Okay, we're we've been blaming title all this time. It's not really a title company issue. It's really, you know, more that we got to appease the lender and the buyer."

23:56 Well, it's no different than most liens which are you can buy it subject to a first mortgage, you know, and pay the first mortgage or not pay it or whatever you want to do with it. And subject to a second mortgage, again, if you want to pay it off or do you want to pay it off or make the payments and risk foreclosure or whatever all that means, but that's your option as a buyer. And so, all those liens to some degree, with exception of a lawsuit, would be one. Now, another situation is bonding around the lien. Sometimes it's required, let's say the lender won't accept that lien and because they think it infringes on their loan-to-value calculations or their calculations of your ability to pay. And so, it has to be removed. All parties agree. Nobody gave permission for it to stay there. But you can bond around it by removing the risk. How does that work? And how what's the bonding rate look like?

24:46 Yeah. So, a bond a we call it a lost note bond. The law the California law provides for a lost note bond, which is basically a loan where we either can't find the beneficiaries on that loan or we know it was paid off years ago or they lost their note and trust deed and long story short we just can't get it removed by the lender properly. So a bond company there's provision in the California law for that bond company to issue a bond. They issue that and that bond actually records with our transaction. When that bond records it moves the liability for that lien off of the homeowner off of the title company and moves that liability for that lien onto the bond company. Now the bond company has indemnity signed by the owner so the owner ends up would owe the bond company but bottom line it

25:37 The seller you're talking about in this case. Exactly the seller yeah. So the seller would sign the bond and if the bond company ends up taking a loss they go back after the seller but long story short is that bond allows us to close our transaction and that bond that records is essentially the same as a reconveyance or a satisfaction of whatever that lien is. That's what the bonds are that's what they're for. You know there's some guidelines we can talk details when it comes to it there's some guidelines. I think it usually the loan has to be at least 10 years old etc. But the bond companies I believe they charge 2% of the amount. So if it's a $100,000 mortgage they charge 2% of that loan amount plus whatever their fee is. I think they're never less than 500 bucks. But it's you know rather than not being able to close a transaction or rather than having to worry about the whole 100,000 that's owed if sufficient proof can be given to the bond company that there should be no you know no one coming back on that lien then the bond company will issue their bond and you can close without any responsibility for that you know falling on the buyer and it's as though it's gone by employing a bond company.

26:50 And this comes up in reverse mortgages more than others because typically the owners had the property for 40 years. They paid off their FHA loan or their VA loan or their conventional loan, you know, 10 years ago and they'll go, "Well, the it was a 30-year loan and it's been 40 years. Obviously, it's gone." But, if you can't get it reconveyed, you still have this title issue open. And somehow you have to kind of Now, sometimes I know title companies will clear it without having to pay for a bond. Other times, they need the bond. So, these are situations where you have to go individually and look at them or research them.

27:21 Yeah, and I always try to, you know, I don't want anyone to have to go through the expense of having a bond. So, we always try to search and research and figure out a way that they can close it without the without the bond. But, as a last resort, you can rely on the bond to clear it if the bond company will issue it.

27:37 And that's why to pull your prelim early and check it early, get started early cuz if it takes 60 days, nobody cares day 1 through 59. Day 60, it's a panic if you haven't got it cleared. So, that's why you got to get that stuff done. Yeah. One of the things that comes up often with a reverse mortgage is uninsured deeds where you have a case where maybe they created a trust after they did their last mortgage and moved the property into that trust. Or the opposite. They had a trust and for whatever reason, they took it out of the trust to do a mortgage and now they're getting ready to put it back in. So, the deed that did that is usually not done with title insurance, which creates some potential problems particularly if the people on the deed are no longer the same people. If they're divorced, somebody died. Talk a little bit about uninsured deeds and how they need to be looked at right away and corrected as always possible as well.

28:31 Yeah, absolutely. So, an uninsured deed is basically a deed that records just randomly without title insurance. The reason it's a big deal is, you know, it's not a big deal if I'm deeding my property to my trust, no big deal at all. If I'm deeding it out of my trust to get a loan or whatever, those things are not a big deal. Where it becomes more of a big deal is if, you know, my name is Kevin Sayles. Now, I deed to John Doe. I deed my property to John Doe. Because in reality, most of us don't ever get a property given to us for free. And I would be willing to bet that most of us that do get one given to us for free can show evidence why it was given to us, right? Like, it was in my grandmother's trust and that's why it went to me. Or it was my father's will. We did a probate and that's why it was given to me. And so, in or my mom was getting elderly and said, "Hey, I want you to take care of this property now." So, she gave it to me. So, most of the time, I can go back to my mom and say, "Hey, Mom, remember that rental property you gave me, you wanted me to start handling? I'm refinancing it. I need you to sign this saying you did intend to give me the property." So, it's a fraud prevention thing. And when it comes to an uninsured deed, uninsured deeds have been found I don't want to say it that way. I want to say it this way. When we've seen uninsured deeds, sometimes fraud has been discovered in those. I can name multiple scenarios where there was a deed that recorded and there was fraud.

29:54 So, whenever there's an uninsured deed, we want an affidavit signed by the person who signed that deed, the owner who had the property before the new owner. And we want them to sign saying, "Yeah, I knew what I was signing. I did intend to convey it to them. Blah." There's a whole affidavit that they sign. The reason for that is that way we're double-checking that it wasn't fraud or the property wasn't stolen. So, the uninsured deeds some You know, a lot of times what you see with family situations is mom added son or daughter onto title. Dad added cousin Willie on the title. And we just have to confirm those things because sometimes the scenario was dad was getting older and Uncle Willie tricked him and that's how the deed got, you know, the deed got recorded. So, uninsured deeds are something where we want to make sure that if no title insurance was issued at the time, meaning it was not a refinance and they recorded that deed with the refinance, or it was not a sale, and they recorded that deed as part of the sale, we want further documentation as to why that happened. Now, I've seen divorce cases, okay? There's a divorce. The wife doesn't want to go back to the husband to have him sign anything, right? So, they just provide a copy of their divorce. It shows you got the property, you know, wife got the property during the divorce. No problem. Problem solved.

31:05 Court order. Yeah, court order. So, when there's a court order, I've seen I've seen others where these two parties they owned properties together. So, Bill, it's like if you and I own properties. We own two properties together. One in Santa Monica, one in Pasadena. And we decide, you know what, Bill? It's kind of useless for us both to own both of these properties. So, you take the property in Santa Monica, I'll take the one in Pasadena. I think I'm getting the bad deal on that because I'd rather have the property in Santa Monica than Pasadena, but just for the sake of example, you take that one, I'll take this one, and they sign over. And so, it's kind of a business arrangement. So, we verified that. I literally had this over the summer. We verified that. There were multiple properties. This one was taking that one, that one was taking this one. And we verified that. And okay, it makes sense. It makes sense why Bill deeded his interest over to Kevin because Kevin deeded his interest on the other one over to Bill. So, when we can see and the story makes sense and it's justifiable, and we see that it's not fraudulent, then we're okay with it. Trust distributions, you get a property from a trust. We have to verify the trust to know that one, sometimes it's a successor trustee. We have to verify the trust to know that person who signed the deed was the valid person who has the right to sign the deed. And two, that it went to who it was supposed to go to. If the trust says give the property to Bill, and then the property went to Kevin, that's an issue.

32:23 Why did this happen? Was there some agreement? So, we have to look at those things because as a title company, when we're providing insurance, when we're closing a transaction, we're providing an actual insurance policy where claims can be made, and we have to verify, you know, who these parties are and that transfers were done properly. So, when there are uninsured deeds, we need to do a little further investigation to make sure everything's clear on those prior to issuing title insurance.

32:49 And sometimes is the problem. Sometimes the name, you know, Willie Jones is really William Jones and he was William Jones when he got it and he's Willie when he's giving it away and there's a problem or it's Willie Jones Sr. Or Willie Jones Jr. Which one signed which one? And it's not clear. And so, these are reasons why ideally you want to have things done insured if you're going to do a reverse mortgage. You want you want to let us say you have to take out the trust. That's a warning sign. It's one thing if you have a bad trust, then fix the trust. But, if it's just because the lender doesn't want to check the documents, they're putting your deed at risk. And I would always tell people push back on that because, you know, it's pretty common now that we can do refinances or even a purchases with trusts. It's not what it was 20 years ago where it was a big issue. Yes, it saves a step for the lender, but avoiding uninsured title issues down the road or cleaning them up when you have them as a reverse mortgage originator, you pull up a prelim. Again, when you see an uninsured deed, just know there might be some work or time involved in it. Give your escrow officer or whoever handles this, your attorney, real estate attorney for your closing state, get them on start it right away. There's no reason to waste time on this cuz it has to get done. It has to get fixed. You know, Kevin, I we're recording this on a Monday morning. I so appreciate your time. We got a little bit over your fantastic resource. You've been a great resource to me. For anybody who wants to get a hold of Kevin, his website he's at Lawyers Title Company and he is by title an account executive and vice president. And I have his contact information down below.

34:20 Phone number [phone number]. And Kevin Sayles, S A Y L E S. That's a question. Why is it Why is there a Y in Sales? Well, because if you the real Kevin Sayles, you need to get S a y l e s at l t I c sellers title inc sellers title insurance company.com. Kevin, as always, thank you so much for bringing so much value to our industry. I always appreciate your help and thank you so much. Oops, I lost you there. Thank you so much for having me. I really appreciate it.

34:49 Thank you for having me. I always love being on here cuz sharing this type of information just makes all of our jobs easier in future. Well, thanks. Thanks so much and I and I do believe that. I do believe that, you know, this episode a little different today, but this about us being better at our craft and being able to serve our customers better, whether it's a referral source, an attorney, a fiduciary, or our customers by just taking some extra steps. And yes, AI's work on it, but the AI can enhance your business if you know how to use it properly. So, I'm Bill Gross at the Reverse Mortgage Podcast. We have a new episode every week. Usually with mortgage originators, also executives and vendors that support us. Kevin's the one of the top title reps in California. He'd be a great resource if you use him here locally. If I can help in any way at Bill Gross Pro beta on social media, as always, and make today your best day ever. Thanks so much.