I have read the article.....I have discussed it with an attorney that was at a Real Estate Bar Luncheon today that the chairman of the real property section of the state bar was the guest speaker.
For anyone who is interested in this, I will type in some of the article.
Bar Ruling Would Limit Use of Paralegal Search Companies Lawyers Weekly, November 8, 2004
Independent Title Search Company
In proposed 2004 FEO 12, an attorney with a small real estate practice wanted to hire an independent company, ABC, to do title searches. ABC used paralegal employees or independent paralegals to search the public records.
Under the contemplated arrangement ABC would provide the title notes to the attorney, who in turn would certify title to a title insurance company. After the closing, ABC would update the title and record the documents. The attorney asked whether his employment of ABC under those facts was ethical. The committee ruled NO, citing 2002 FEO 9. That opinion states: "Satisfying the duty of competent representation is not possible if the non lawyer who is performing the public records search, in order to provide information upon which the lawyer will base her opinion on title is employed by an independent, organized entity and is not, therefore, under the lawyer's direct authority and supervision." RPC 216 states.
Inquiry #1 uses the scenario above... hiring ABC company.... Question is: May Attorney A employ an organized entity, such as ABC, to perform a public records search for a real estate closing?
Opinion #1 NO
Inquiry #2 Does it matter if a title insurance company to which Attorney A provides a title opinion owns ABC?
Opinion #2 The answer to this question requires an interpretation of NCGS 58-26-5(a). The Ethics Committee cannot provide an opinion on an issure of law.
Inquiry #3 Does it matter if there is common ownership of the title insurance company and ABC?
Opinion #3 See opinion #2
Inquiry #4 Does it matter if Attorney A has a financial interest in ABC?
Opinion #4 No
This opinion will be voted on in January by the NC Bar Association.
Sounds to me that the title companies using independent paralegals in NC will be shut out of business. As an independent paralegal, I will still be allowed to work with the attorney but not for the title companies.
The Federal Trade Commission stepped in and allowed the title companies in North Carolina to provide title searches to the lenders to refinance without the attorney but not to do real estate transactions (purchases). So the NC Bar is working hard to keep the attorneys from becoming just signature/witness closers.
Where does that leave you title companies? Will you fight this NCBar Ruling so you can continue to do business in NC? I witnessed first hand Home Focus getting shut out of SC and I lost all their business overnight. It was a $10,000.00 account in the six months that I had their business. Bank of America was forced to use the local attorneys for their refinances.
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