How Much do You Know About Land Titles?
The business of abstracting is changing. I have been teaching title searching for years, but it’s different now. Residential abstracting has gone by the wayside in favor of one-owner and two-owner searches. Title Insurance companies do not abstract and do “risk underwriting,” nor do they “cure titles.” They just insure over problems. That has worked in the past, but as has been said -”How’s that workin’ for ya now?
But the best, most qualified abstractors are busy with new lines of work: Oil and Gas Lease titles, Cell Towers, Commercial Property Titles and Wind Farms. These are now the day-to-day jobs of those abstract experts who are truly experienced in land titles and know how to search titles in depth. Here is an article on one such instance, a county recorder who has to limit the number of title abstractors because of the volume of work in Oil and Gas Leases. How much do YOU really know about abstracting titles? Is it time to bone up? Do you need more business?
Read More at the Post-Gazette.
ALTA REVISED SURVEY STANDARDS TAKE EFFECT FEB. 23, 2011
New Survey Standards have been approved by the American Land Title Association (ALTA) and the National Society of Professional Surveyors (NSPS.) The purpose of the Minimum Standards is to set nationally recognized uniform standards for land surveys and to assist title insurance companies, surveyors and lenders to use nationally recognized uniform standards to assist title insurance companies, surveyors and lenders.
The new standards discourage the drafting of new legal descriptions and also require:
• a reference to any title commitment be included on the face of the survey
• a vicinity map
• more detailed information regarding easements and right-of-way lines
• use of a standard certification.
See more at ALTA.org
Lenders Must Follow Local Recording Rules
An interesting case out of North Carolina. Orange County, No. Carolina has designated a PIN System (Property Identification Number) as the “official recording index.” In the case where two parcels were listed on a deed of trust, but only one PIN was listed on the DOT, the Court Ruled there was no constructive notice of the second parcel, even though the legal description and the names of the Grantors and Grantees were properly listed on the Deed of Trust. Therefore the typical rule that “if you can find it in the Grantor-Grantee Index, you have constructive notice” is out the window.
“…Because the deed of trust did not include the PIN for Tract I, it would not have appeared in any bona fide purchaser’s search for Tract I in the PIN Index. Requiring a bona fide purchaser to search the grantor/grantee index in addition to the PIN index would render the PIN Index superfluous and the North Carolina law adopting it meaningless.”
Read more at Legal Blog
Huge Loss for MERS in NY Court
An important state case – NY court holds that the appointment of MERS “as nominee for the lender and its successors” is insufficient to allow MERS as an agent with legal ability to assign mortgages.
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK
In re: Case No. 810-77338-reg
FERREL L. AGARD, Chapter 7 Debtor
MEMORANDUM DECISION
The Debtor’s argument raises a fundamental question as to whether MERS had the legal authority to assign a valid and enforceable interest in the subject mortgage. Because U.S. Bank’s rights can be no greater than the rights as transferred by its assignor – MERS – the Debtor argues that the Movant, acting on behalf of U.S. Bank, has failed to establish that it holds an enforceable right against the Property.۩۩۩۩۩۩
“The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.”
Right of First Refusal has Come Alive
A neighboring condominium association just bought a unit in foreclosure under its “right of first refusal.” For those of us in the Title Insurance industry, we expect to see a “Right of First Refusal” in condominium and homeowner association documents. We typically list the exception on title work, but most of us have rarely, if ever, seen a homeowners Association actually exercise that right- until now. Condominium and HOA Boards, in order to protect their communities, are taking title to these units that are in foreclosure and disrepair. They are repairing them, at the very least on the outside to protect the look of the community, and then renting them (often putting them on the market for sale while rented.) It can be a win-win. Rent comes in, the units are maintained and homeowners are protected. A good article in the Miami Herald gives more information.
Closing and Equitable Title
Another good Equitable Title Post for mortgage and title closers. Shows what can happen when intentions to maintain an interest are not turned into reality because the language was not clearly spelled out when creating the deed. Creating legal documents is much more than filling in the blanks. A portion of the lawsuit reads:
The first lender intended to retain a security interest on the second parcel for the two remaining loans. As we explain below, that is not what happened, and we must address the issue of whether the title and sub-escrow company is liable to the first lender.
Read more from Leagle.com here
Watch Out for Equitable Mortgages
When I teach title examination, closing, title abstracting, and other real estate classes, you have all heard me talk about “Equitable Mortgages,” i.e. A deed is given that has specific language in it that lessens the full impact of the conveyance. A typical example might be an owner deeding a lot to a builder who is going to build them their dream home. Such deed might contain the restriction that “this deed is being given as security. ” That language implies that the persons conveying have an expectation to get it back and in fact it becomes equal to a mortgage (equitable mortgage) in terms of closing, laws, etc. Here is a must read new article from Minnesota that points out such problems. Here is a Press Release by 24/7 that gives a couple examples of the complications with such a deed. It is a MUST READ for title people.
Excellent Primer on Foreclosure and Mortgage Assignments and Ownership
Here is an outstanding article from NBC, explaining in very clear terms, the problems with Judicial Foreclosure vs. Foreclosure by Advertisement, real problems with Robo-signers, etc. A good read for those of us in the Title Insurance and Abstracting Industries. Followit here at NBC News
Good Court Call on C, C & Rs
This is a good court case for students and technicians in the title industry about enforcement of covenants, conditions and restrictions. It examines priority of liens, a land contract a second mortgage that is a Purchase money mortgage (yes, it is possible,) a foreclosure, etc. It was complex, but well-reasoned.
Read through this excellent case at Leagle.com here
Child Support Liens Now Last 20 Years in MN
Hi Jeanne,
Thanks for a wonderful class. Your classes are always so informative and helpful. I was just picking up my class materials to get your email address to ask a question. Can you tell me where I can find the info regarding Child Support Judgments being extended to 20 years. The book just lists MSA541.04, but that didn’t help me find it. I spoke with Goodhue Co District Court and Rice County District Court and no one has heard anything about it. Thanks. Luan
Hi Luan, The revision is in the 2010 laws that don’t show up except in MN Sessions laws. It is so new it hasn’t caught up yet at the revisor’s office. You can check the validity at the address below.
So glad you enjoyed the class. It was a wonderful group! Best, Jeanne
https://www.revisor.mn.gov/laws/?id=238&doctype=Chapter&year=2010&type=0#laws.0.4.0
Home Closing 101: An Educational Initiative of the American Land Title Association
