State Takes up Question of Mortgage Inspection Reports
The Oklahoma State Board of Licensing for Professional Engineers and Land Surveyors is considering a position statement. The Board has been reviewing ways to alleviate the public misunderstanding and misuse of Mortgage Inspection Reports. The problem originates with homeowners who receive copies of these reports at closing and then rely on them to build improvements (even though there is disclaiming language on the drawing itself.) The report appears to mislead homeowners into thinking they can rely on the information shown thereon. Read more on this at The American Surveyor
Time Is Running Out To Register For Land Title Abstracting Class
Don’t forget to Register for the Annual Title Abstracting Class In St Paul, MN on May 2&3. The 200 page “Principles of Abstracting, Searching and Land Records Management” manual has been updated for 2011 to reflect many additional topics including: UCC’s; dealing with Manufactured Housing and Mobile Homes; changes in foreclosure laws; and statute of limitation changes on liens. If you haven’t been to a title abstracting class recently for updates, or if you are looking to obtain your license, this is the time to sign up. Hope to see you there!
FEDERAL REGULATION OF TITLE INSURANCE – WHY NOT?
There has been much discussion about regulating insurance, including title insurance at the federal level.
Of all the lines of insurance, none are as inexorably entwined in state and local laws as title insurance. Local practices regarding real estate vary from state to state and even county to county within a state. The abstracting, examining and underwriting of title insurance involves a review and assessment of these state and local-specific records, so that title policies can only be properly issued in connection with inherently understood local transactions. I believe it would represent an enormously burdensome and expensive undertaking for a federal agency to establish federal regulations that would reflect variations in the real property law of all 50 states. State regulators are much closer to local practices and can respond to changes in the marketplace more quickly. Therefore, I believe state regulation remains the most effective form of supervision for our industry.And since when is a “bigger government agency” better than local government?
MN Department of Commerce Announces Staff
ST. PAUL, MN – Department of Commerce Commissioner Mike Rothman announced Steve Carlson as Deputy Commissioner of Administration. Kevin Murphy was re-appointed as Deputy Commissioner of Financial Institutions and Jaki Gardner will continue as Assistant Commissioner of Insurance. More detail on staff appointments in Commerce Press Release
Minnesota Department of Commerce Seeks Information on Escrow Accounts
The Minnesota Department of Commerce(Department) is conducting an informal investigation regarding
the interest or other monies earned on title trust and escrow accounts. Please submit detailed responses
to the following questions no later than February 28, 2011.
An officer of the agency must attest to the accuracy of the responses and sign the responses. Failure to
comply with this subpoena may result in legal action being taken against your company to compel
compliance pursuant to Minn. Stat. §45.027, subd. 3 (2008), and may be subjected to civil penalties of up
to $10,000 per violation.
Please direct any inquiries concerning the above questions to the undersigned.
Thank you for your cooperation.
Kerry Banks
Minnesota Department of Commerce
kerry.banks@state.mn.us
Phone: 651-296-9082
Fax: 651-296-4328
SURVEY
Company Name (as licensed):
Company NAIC Number (if underwriter)/License Number (if agency):
Mailing Street Address:
City:
State:
Zip Code:
Date:
As an officer of the company to whom this letter is addressed, who is authorized to sign on behalf
of the company, I do hereby attest to the accuracy of the above responses.
Company Officer:
Company Officer Title:
Company Officer Telephone Number:
Company Officer E-mail Address:
We are seeking Minnesota specific information only. Responses provided should only reflect
monies related to Minnesota transactions. If you are unable to provide Minnesota-specific
information, please provide a detailed explanation, in the space provided under question number
15 below, of what other states are included in your figures as well as the approximate
percentage that reflects Minnesota transactions.
Trust Account Questions
1. Is your company’s trust account an interest-bearing account? Y/N
2. If your company’s trust account is interest-bearing, is the interest a fixed or variable rate?
2a. If fixed, what is the interest rate?
2b. If variable, please describe how the interest rate is calculated and provide the rate,
effective 12/31/2010.
3. Please provide the average daily balances for your company’s trust account, whether
interest-bearing or not, for the following months:
February, 2010:
May, 2010:
August, 2010:
November, 2010:
4. What does your company do with any interest earned from the trust account? Please select
the best option and provide a detailed explanation of how the money is returned, used,
donated or otherwise treated. If you select option “d,” please include a breakdown, by
percentage, of how each option is applied.
a. The interest earned is returned to the buyer/seller/borrower
b. The company keeps the interest
c. The company donates the interest
d. A combination of the above
e. Other
5. If applicable, approximately how much interest did your company’s trust account earn
during the calendar year 2010?
Escrow Account Questions
6. Does your company maintain any interest-bearing escrow accounts? Y/N
7. If your company’s escrow account is interest-bearing, what monies are typically deposited
into such accounts?
8. If your company’s escrow account is interest-bearing, is the interest a fixed or variable
rate?
8a. If fixed, what is the interest rate?
8b. If variable, please describe how the interest rate is calculated and provide the rate,
effective 12/31/2010
9. Please provide the average daily balances for your company’s escrow account(s), whether
interest-bearing or not, for the following months:
February, 2010:
May, 2010:
August, 2010:
November, 2010:
10. What does your company do with any interest earned from escrow accounts? Please select
the best option and provide a detailed explanation of how the money is returned, used,
donated or otherwise treated. If you select option “d” please include a breakdown, by
percentage, of how each option is applied.
a. The interest earned is returned to the buyer/seller/borrower
b. The company keeps the interest
c. The company donates the interest
d. A combination of the above
e. Other
11. If applicable, approximately how much interest did your company’s escrow account earn
during the calendar year 2010?
Other/Combined Questions
12. If your company’s trust or escrow account is not interest-bearing, do those accounts
provide your company with value in some other way (through account analysis, short term
CD’s, value-added accounting, etc.)? Y/N
13. If your answer to question 11 is yes, please describe the nature of the value provided.
14. If your answer to question 11 is yes, please quantify to the best of your ability the value
provided during calendar year 2010.
15. Does your company contract out any closing and/or settlement services?
If “yes,” please complete the following:
15a. What types of services do you contract out, and when do you contract these services?
15b. From whom do you contract out these services? Please provide name and contact
information for ALL entities with which you contract.
15c. For services contracted, are escrow monies (other than title premiums) ever returned
to the agency for disbursement?
16. Please provide any additional information you may deem necessary to support or explain
the answers you supplied above.
Familiar Minnesota Title Company Owner Charged in Theft of Escrow Funds
Linda Tuttle-Olson, owner of Albert Lea Abstract Company was charged this week with 13 felony counts in a theft that has left at least a dozen victims out more than $1 million. Most of those victims had placed tens of thousands of dollars in escrow accounts overseen by Tuttle-Olson’s company. According to the criminal complaint, Tuttle used a chunk of that money for gambling.
People “don’t think twice” about putting money in escrow accounts, said Albert Lea Police Chief Dwaine Winkels. “There’s just disbelief among the victims that this could happen and that there’s not much regulation or protection for people. These businesses are entrusted with large sums of money.”
More at the StarTribune.
Yes, Virginia, You Must Attend the WHOLE Class
I take my real estate educators license very seriously. I put in a great deal of time to come up with current, relevant courses that I believe will be of value to attendees. I keep all appropriate records, verify the identity of attendees at my classes, get all required course approvals, etc. And I don’t bread the “rules.” I have people ask for credit when they did not attend an entire class. Sorry, I can’t do it. And surprisingly for many, the Department of Commerce is watching. One instructor now faces $90.000 in state fines for flagrant non-compliance.
The instructor told commerce investigators he started teaching in the mid-1990s and was a registered instructor for insurance professionals. However, he threw the rules out and seriously abused the system. As a result, licensed agents who took his “education courses” have lost their licenses, and the instructor and the company he teaches for have been a July 20 administrative hearing. More at the Star Tribune.
MN Closer Jailed for Racketeering
A Forest Lake couple, Cynthia and Steven Strand, are in jail, facing 35 charges that allege $1.2 million was diverted from real estate sales through the couple’s closing company. Strand Closing was licensed as an independent closing service that closed loans for various title insurance agents underwritten by Old Republic, First American and Ticor. See more at MPLS Star Tribune or Kare 11 news
Bad Title Agent Leaves Innocent Consumers in Foreclosure
Consumers have been forced to teach their children not to answer the door because on the other side may stand a bill collector and other innocent victims find their home is now in foreclosure. Their problem: refinancing their home mortgages with Fort Wayne Title. The Indiana Secretary of State’s Office called it “one of the worst mortgage fraud cases our office has ever seen.” The owner, Joseph Garretson was sentenced to 11½ years in prison Friday for the mortgage scheme he orchestrated that removed more than $3.4 million from homeowners, placing them in financial turmoil. See more at News-Sentinel
Abstractors – Are you Searching ALL the Indices?
A recent Minnesota Case is a great example of the liability that abstractors carry. An owner of Property purchased two new parcels, putting a mortgage on both parcels, along with a parcel previously owned.
The Scott County Recorders office, when indexing the documents, properly filed it Grantor-Grantee, but missed indexing the legal description on the third parcel in the mortgage that was previously owned.
A court battle ensued as to whether or not there was constructive notice, because the mortgage was not shown on the Tract Index. To make a long story short, the court ruled that the mortgage could be found using the Grantor-Grantee, and that the mortgage was in fact a lien on the land.
I presume that this happened due to the fact that most computerized systems allow copying of names and legal descriptions between documents, and that the County Employee missed the fact that there were 3 parcels being mortgages, while only 2 were being purchased at that time.
While not a standard practice to search the grantor-grantee index for mortgages (especially with all the common names in Minnesota) it does make you think. It also reminds me how we rely on such things as affidavits to ask for additional information on sales. I have to say, I don’t like it, but I think the court was correct in its assessment. Until just five years ago, or so, the Grantor-ee Indices were the only legal indices in the state, but with the change in law requiring a tract index in addition to the Reception book, I think we began to rely on the tract more than ever. I think if I were doing a large commercial transaction in particular, I would double check the Grantor-grantee. After all, it doesn’t take long if you have it on computer, and you could have tremendous liability.
Home Closing 101: An Educational Initiative of the American Land Title Association
