CHARLENE PERRY's Blog

Title Industry tasked with identifying money launderers

CHARLENE PERRY — Thu, 14 Jan 2016 15:14:37 EST

It was with interest that I read this report today that adds just one more thing to the list of things we title agents are/may be tasked with having to do for the Government.

http://thelegaldescription.com/TLD/ArticlesTLD/Title-industry-tasked-with-identifying-money-laund-65807.aspx?utm_source=vwTLDget&utm_medium=email&utm_campaign=TLD_Thurs_Enews

From The Blotter, Wednesday, January 13, 2016 we learn that the Financial Crimes Enforcement Network (FinCEN) has issued Geographic Tracking Orders (GTO's) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay "all cash" for high-end residential real estate in the Borough of Manhattan in New York City, N.Y. and Miami-Dade County in FL.

Luckily I am in Maryland and so far am not tasked with identifying or reporting who the true "beneficial owner" is behind a legal entity involved in "all cash" transactions, but my fear is that this is probably just a test in these states and this will become a nationwide requirement.

While we understand the importance of combating money laundering in the real estate sector, it's just one more thing that we as title agents are being asked to do, adding more time and costing more money for each transaction. As it is we are made to report to our State government the sale of the real estate, the Federal government for the sale of the real estate as well as collecting, in some instances, withholding taxes for our State on the sale of the real estate.

According to the article, "FinCEN is covering certain title insurance companies because title insurance is a common feature in the vast majority of real estate transactions".

It will be interesting to see how this plays out in the coming months. For now, this is a "temporary order" becoming effective as of March 1 and running 180 days; expiring on August 27.

TRID and it's impact on abstractors

CHARLENE PERRY — Mon, 05 Oct 2015 15:37:36 EST

Today I have seen a lot of discussion on these boards as well as on other sites asking how the new rules under TRID impact abstractors. Let me see if I can add some insight.

TRID (TILA/Respa Integrated Disclosure) is an acronym that we in the settlement services industry are using to describe a whole set of new rules we must all comply with as of October 3, 2015. In actual fact this means that any loan application taken on or after October 3 is affected by these new rules.

Of particular interest to consumers and to Realtors is the use of the new CD (Consumer Disclosure) which is to be prepared, for the most part, by the LENDERS not by the Title Agent. This is a totally new concept for all of us and requires that we all work together in concert to ensure that the lender has everything that they need from all of us to enable the lender to meet delivery time lines on the CD. (CD to consumer 3 business days in advance of closing)

So, what does that mean to you, the Abstractor?

Your turn times are going to be reduced and

Your payment time is going to be extended

Because the lender needs everything from the title agent not less than 10 days prior to closing in order for them to meet the 3 day delivery rule, title agents, Realtors, abstractors and others must work together as a team to get all of the required information together as quickly as possible. This means that you as an abstractor will likely be seeing shorter turn times.

In addition because of the new rules lenders are asking that Realtors write 60 day contracts rather than 45 day contracts that means that abstractors will be seeing their payment later than what they may currently be accustomed to.

AND, we must now provide invoices for all fees being charged on the CD for services rendered for such things as abstracts and copies. I did see one post in the forums today regarding providing invoices for copies from the courthouse. I realize that this is a royal PIA, but it is part of the new rules to insure that the consumer is able to shop loans and total closing costs prior to commitment to a loan. Lenders are requiring that we present them with all invoices to be charged to the consumer including invoices for title search, copies, judgment searches etc. Many title agents are lumping these fees into their total settlement fee so they may not be looking for individual invoices, but, in the instance where we need lots of copies out of the court file, for instance in a foreclosure situation, those fees are generally charged on a separate line item. If they are charged on a separate line item, we MUST have an invoice to prove the cost.

Working together we will all adjust to the new rules. For the first few months we may all find that things feel a little more burdensome and difficult but I think that after the initial shock we will all come to like the new way of conducting business.

When is a lien not a lien?

CHARLENE PERRY — Thu, 28 Aug 2014 13:40:39 EST

When the County can't provide a valid legal argument for it's collection!

Almost every jurisdiction in Maryland requires that title agents, or anyone else wishing to record a Deed, must acquire a lien certificate from the jurisdiction which references any liens against the property filed by the county in which the property is located. This document also verifies whether open real estate taxes and open water bills are paid.

In the instance case, a lien certificate was acquired from the jurisdiction in which the property is located. The lien certificate reflected open real estate taxes AND a State tax lien in excess of $25K!

The seller had no knowledge of any open State liens having been filed that would in any way attach to their personal home. The lien in question was related the non payment of personal property taxes that had been assessed to Mr. Seller's defunct business.

The property in question was held by husband and wife as tenants by the entireties
The "lien" was filed against the LLC that had been owned by husband only.
The LLC was forfeited and no longer doing business

When we took this issue up with the County and inquired as to how they came to put this lien against the personal home of the parties, we were told that they always put these type liens on the lien certificate and that the lien was valid; and then the attorneys got involved..

The seller's attorney searched for a relevant statute that would allow the County to "pop" this lien against his personal home but was unable to find any relevant State or local rule, statute, etc. Seller's attorney then asked the County Attorney to provide the relevant statute that enabled the county to attach this lien to the personal home of the sellers. County attorney was unable to provide any statute to justify the collection.

At the end of discussions the County attorney admitted that they often put these type liens on the "lien certificate" and that very few ever question the lien and so the County (or State as the case may be) ends up getting payment when the property transfers.

At the end of the day the County removed the "lien" from the property and the Deed was able to be recorded without the payment of the 25K. Had we not inquired about the validity of the lien in the first place, this payment would have been made, the sellers would have been none the wiser about the validity of the placement of the lien against their personal home and the County/State would have used us (the title company) as a debt collector for a lien that did not apply to the transaction.

It's going that extra step that sometimes makes all the difference to the parties in your transaction. Take the time to question things if it just doesn't look or feel right to you. Using your years of experience, your knowledge and your network of professionals to work through a problem make you stand out in the crowd of thousands of title agencies vying for everyone's business.

Third party vetting issue rears it's ugly head again

CHARLENE PERRY — Fri, 15 Aug 2014 16:30:28 EST

Have you or anyone you know ever been asked to pay a fee to be vetted by a third party vetting services as a condition being put on a lender's approved vendor list?

For the first time in over two years, I was recently asked by a loan broker whether or not I was vetted through Secure Settlements, a third party vetting agency who claims to be able to properly vet a title agent to insure to the lender that they (the title agent) are compliant with best practices, and are trustworthy by offering a comprehensive risk management report of third party services providers, including title agents, appraisers, accountants, attorneys, document preparation firms, etc.

In 2012 this same company was very actively engaged in trying to get all lenders to use their services and many, if not most, lenders began to think that perhaps this third party service was needed to protect the consumer.

As a result of the tireless efforts of the American Land Title Association and the various state Title Associations it was determined that in fact the underwriters all do a phenomenal job of vetting their title agents and agencies with annual audits, monthly reports, monthly on site visits, etc. , and so, when this e-mail came to me inquiring as to whether or not I had been 'vetted' by this third party vendor, I replied as follows:

No, it is not something I have been required to do despite the best efforts of Secured Settlements to capture business from title agents after the CFPB issued a statement some years ago regarding oversight of title agents and others who have access to consumer information, which statement the CFPB has since clarified.

A couple of years ago this was an issue but I thought vetting through Secure Settlements or any other 3rd party vetting service was a thing of the past. I was very actively involved in this issue on behalf of MLTA in 2012 and am familiar with the way in which Secure Settlements attempts to capture business by promising referrals, etc if a vendor pays to be vetted. This practice has been suggested by some to be a violation of RESPA Section 8 (kickbacks and referrals) see link here http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/ramh/res/respamor#HT

None of the major lenders, including Wells Fargo, B of A etc, require vetting through this or any other 3rd party. They rely instead on the underwriters, all of whom run credit checks, background checks,licensing checks, bonding requirements etc for all of their approved agents. The closing protection letters used by all underwriters insure the lender against such things as fraud, failure to comply with instruction, etc. The ALTA, (American Land Title Association) the MLTA (Maryland Land Title Association) and the NAILTA(National Association of Independent Land Title Agents) as well as other State Land Title Associations worked tirelessly to address this issue of 3rd party for profit agencies providing a redundant process to do exactly what underwriters are already doing. The CMC (Consumer Mortgage Coalition) has recently joined forces with NAILTA to further address this matter and in addition ALTA has implemented and is enforcing its Best Practices All title agents must be compliant in order to retain their appointments with their underwriters.

Further, these 3rd party vetting agencies are:
NOT able to measure competency or skill
NOT a governmental agency or endorsed by the government
NOT a licensing authority
NOT an independent licensing agency
NOT a State authorized disciplinary agency

So, the questions for today are:

Have you recently been asked whether or not you had been "vetted" by Secure Settlements or any other third party vendors. And, if so, what was your reply?

If you have been vetted by a third party vetting service, what was your reasoning for paying their fee and going through their process?

Non Public Information and title agents

CHARLENE PERRY — Thu, 14 Aug 2014 16:35:12 EST

IS YOUR NON PUBLIC INFORMATION BEING PROTECTED?

At least once a month you probably receive one or more privacy policies from companies that you do business with. Most of us don't even bother to read these privacy policies any more because we are so used to seeing them.

Have you ever actually given any thought to just what information your service provider is trying to protect? Do you know what NPI is? Do you know how yours is being protected?

What is NPI?

Non-public Personal Information is any data or information considered to be personal in nature and not subject to public availability.

Personal information includes, but is not limited to:

• Individual names
• Social Security numbers
• Credit or debit card numbers
• State identification card numbers
• Driver's license numbers
• Dates of birth
• Health records when the disclosure of the information in question would reasonably be considered to be harmful or an invasion of privacy

If you take a moment to think about that list and then reflect back on the information you have been asked to provide to your lender when making a loan application, then you can see just how much of your non public information is out there for the taking. Did you know that your loan application is given to your title agent at closing so that the title agent can have you sign it at closing? Are you aware of the steps being taken by your title agent to protect your NPI?

ALTA (Amerian Land Title Association) and all state Land Title Associations including MLTA (Maryland Land Title Association) have been working hard to insure that all title agents are compliant with what is know as Pillar #3 of the ALTA Best Practices. Pillar # 3 specifically relates to securing your non public information.

What are the steps that we at Key Title, Inc. are taking to insure that your NPI is secure?

Non-Public areas of our office where NPI is stored
Background checks and screeening of all employees who are or will be authorized to access your NPI as a part of their job description
Secure safekeeping of all NPI in locked cabinets or secure servers upon conversion to electronic storage
Clean desk policy
Locked door policy

All title agents are required to comply with safeguarding your NPI and most are doing an excellent job of doing just that, but...

I had an opportunity to go into a title agent's office just last week and what I saw made me cringe!! The agent's office was small, but well appointed, it had a wonderful receptionist and the title agent was very knowledgeable; everyone was super friendly, but, there were stacks and stacks of files, some wide open, on desks that were visible to the public!

I realize that not every title agency has the space necessarily to afford all of their staff members a private office with a door that can be locked, but, it is imperative that all NPI be somewhere out of the reach of the public no matter the design of the office.

As part of your interview process with a prospective title agency, you may want to take a trip into their office just to see if they are protecting your NPI as though it were their own.

Please call on me for a quote for title and settlement services at 410-803-4800 or stop in to see me!! You are always welcome to come by my office at 35 Fulford Avenue, Bel Air, MD 21014 for the escorted tour and a discussion on the protection of your NPI.

Adding a blank 1st Page Cover Sheet to recordings- Maryland

CHARLENE PERRY — Mon, 07 Jul 2014 13:24:45 EST

Some jurisdictions in Maryland have begun using a 1st page cover sheet which the clerk attaches to the final recorded document.

This 1st page cover sheet becomes part of the public record and is being used by the Clerks of the Court to allow them to have space for their stamps.

Many in our industry have taken issue with the use of this 1st page cover sheet fearing that it will cause confusion in future title searches, specifically as it relates to "being clauses"

It is common practice in Maryland for abstractors to send their report to us listing the open mortgages and exceptions by Liber/Folio using, obviously, the first recorded page as the official reference. It is also common practice for title agents to print page 1 of the document referred to in the title report and to only print the balance of the recorded document if the lender needs it. Title agents typically review the recorded documents on line thereby saving the expense of printing needlessly.

If the clerks of the court insist on using this blank 1st page cover sheet, all recording done in these jurisdiction will have a first page that all look exactly alike on first glance. While the document does have a receipt printed on it which does refer to the document type and the name of the Grantor/Grantee it will be difficult for those of us reviewing title to accurately review and report the status of title without having to go beyond the abstractor's report and retreiving the "actual" first page for review.

And, too, how do we report the recorded document? Do we report the blank first page, which has only a receipt on it or do we report "page 2" which is the beginning of the "meat" of the document?

MLTA has proposed that a compromise be attempted with the Clerk's offices and have suggested that this new blank page be added to the end of the document, rather than at the beginning. The clerk has balked at this option.

I have scheduled a meeting with the Clerk of the Court for Harford County on Wednesday, July 9, 2014 at 1:00 pm. to be held in my office- Key Title, Inc. , 35 Fulford Avenue, Bel Air, MD 21014

If you want your voice to be heard on this issue, please join us. Please RSVP to me at cperry@key-title.com . If you cannot attend, please weigh in here with your opinion of this practice or to offer additional compromise solutions.

Maryland Senate Bill 229- limits on fees charged by Homeowner's Associations

CHARLENE PERRY — Mon, 03 Feb 2014 12:11:44 EST

The Maryland Land Title Association and the Maryland Association of Realtors strongly supports this bill which seeks to limit the fees charged to unit owners/homeowners for resale packages and statements of account.

For some time Homeowner's Associations and Condominium Associations in Maryland have been charging their seller not only for the re-sale packages, but also for the delivery of a statement of account to title agents and attorneys who are handling the settlement transaction on these units.

While most seller are aware of the fact that a resale package is to be delivered to the buyer in advance of closing they are ofen stunned by the extortionist fees that are being charged for these resale packages, most of which are delivered electronically to either the seller or to their Realtor. The fees for these resale packages are due in advance of delivery to seller and are non-refundable in the event the transacton falls apart. I have no problem with the non-refundable requirement at all, but the costs for these resale packages run anywhere from 125-500 dollars, depending on the community association and the company servicing their association.

We in the title industry have also have to pay large fees to acquire a statement of account for unit being transferred. Again, these fees are paid by the title agent, in advance of closing and are non-refundable. The statement of account is critical to our being able to transfer the unit and offer assurances that there are no past due HOA/CONDO fees due and to enable us to advise the buyer of his/her responsibilities toward monthly/annual fees upon transfer to them. In addition we have to advisethe HOA/CONDO Association that the property has been transferred and the HOA/CONDO Association then charges the buyer a fee for updating their records. While the title agent does get reimbursement on the HUD at closing for the cost of the statement of account (if the deal does not fall apart) we take issue with having to pay upwards of $150.00 to obtain informaiton that is critical to our being able to assist the HOA/CONDO with their record keeping.

The Bill seeks to limit the amount of fees that can be charged for these resale packages and statements of account; the bill reads, in part, as follows:

(c) (1) The council of unit owners, within 20 days after a written request 1 by a unit owner and receipt of a reasonable fee therefor, not to exceed the LESSER OF 2 $50 OR THE ACTUAL cost to the council of unit owners, if any, shall furnish a 3 certificate containing the information necessary to enable the unit owner to comply 4 with subsection (a) of this section. A unit owner providing a certificate under 5 subsection (a) of this section is not liable to the purchaser for any erroneous 6 information provided by the council of unit owners and included in the certificate.

As you might imagine the Community Association Institute (CAI) has taken issue with the limit on fees that these companies can collect.

When asked , during hearings, to explain their fee structure, they admitted that the fees were outrageous, but that it was an "anomoly" and not the "norm", They stated that the $50.00 fee is less than their real costs. When asked to explain they essentially described tasks that are normal for any business. Clearly the excessive fees have become a profit center for these companies that they do not want to lose.

If you are a title agent doing business in Maryland please reach out to your representative to support this bill. Maryland is already among one of the most expensive states when it comes to closing costs.

Maryland enacts new Automatic Subordination of Lien law

CHARLENE PERRY — Thu, 10 Oct 2013 10:57:32 EST

For those doing abstracts in Maryland you should be be aware of this new law.

As of October 1, 2013,Maryland’s automatic Subordination for
Junior Mortgages will take effect. In general this means that a mortgagor or guarantor who refinances in full the unpaid indebtedness secured by a first mortgage or deed of trust encumbering
the residential property at an interest rate lower that that of the current
first mortgage/deed of trust is not required to obtain permission from the
holder of a junior lien.

Under the new Statute (Md. Real Property Code Ann §7-112) a
mortgage or deed of trust on residential property which refinances, in full, a
First Mortgage at an interest rate lower than the First Mortgage will, upon
recording, have the same lien priority over a junior line as the First Mortgage
being refinanced, provided that:

The principal amount secured by the Junior Mortgage does not exceed
150,000.00;
The principal amount secured by the refinance mortgage does not exceed the
unpaid, outstanding principal balance secured by the first mortgage plus
an amount to pay closing costs not to exceed 5,000.00 and
The refinance Mortgage contains the following statement in BOLD or CAPITALIZED
letters:

“This is a refinance of a deed of trust/mortgage/other security instrument recorded among the land records of____County/City,Marylandin Liber no.___folio___, in the original principal amount of $___, and with the unpaid outstanding principal balance of $___. The interest rate provided for in the evidence of indebtedness secured by this refinance mortgage is lower than the applicable interest rate provided for in the evidence of indebtedness secured by the deed
of trust/mortgage/other security instrument being refinanced.”

For those of your doing abstracts in Maryland you should be
prepared to see this language in Refinance Deeds of Trusts/Mortgages in the
future.

Call it what you will, but its still EXTORTION

CHARLENE PERRY — Mon, 07 Oct 2013 11:31:32 EST

All I want to do is pay you! So....

Part of the services rendered by title agents is gathering information relating to liens placed by homeowner's association or condominium associations or collection of past due amounts.

Over the last year or so all of the local homeowner's associations have begun charging a fee to THE TITLE AGENT which fee must be paid BEFORE they will even issue a statement of acount to us. These fees range from $50 and up. The homeowners associations will not allow us to collect the fee on the HUD and require that we give them our credit card information at the time we request the statement of acount. Once we pay them they send the statement, and THEN we see that the account has been referred to an attorney for collection. So, the next step? Contact the attorney to get the actual pay off statement! Oh, but wait, it gets even better! The attorney won't give us the pay off statement until we PAY THEM for the statement. The attorneys are charging not less than $100 for their statement and again we are being required to give the attorneys our credit card information so that the pay off statement can be generated. In some cases we can pass these fees on to the sellers; but in cases of foreclosure it is sometimes an uphill battle to get the seller to reimburse us for these fees. It's not fair to charge the fee to the consumer, the consumer is already paying us to provide a service to them, which services includes clearance of liens! So, the title agent ends up in many instances eating the cost!

Our fees are stagnate as it is. We can't continue to pay other people's bills and make a profit. But, we can't ignore the payment of the HOA or CONDO fees. So, it's a true catch 22!

I do not understand how this can be called anything less than extortion! I have to pay for the privilege of getting information to enable me to pay a creditor! Are these firms taking a page out of the play book of big banks? It seems so.

I will be working with the Maryland Land Title Association to see what we can do to address this extortionist practice in Maryland. If you are having the same problem in your state, please take the issue up with your state Land Title Association. Unless we all take a stand this practice will continue!

A SHINING EXAMPLE OF WHY I HATE E-SIGNATURES

CHARLENE PERRY — Fri, 08 Feb 2013 14:38:25 EST

The case at hand involves a elder seller who has relocated to her daughter's home in another state. Throughout the transaction, I have been in touch with seller, through her daugher. There are 2 real estate agents involved, one for seller, one for buyer. Seller will not be attending closing and there will not be a POA used, she will sign in her own capacity.

We are to close today. Seller has delivered all documents to me signed in ink and properly notarized. Good to go, right? Yup, until....

At the final walk through it is discovered that the house is full of furniture, no, not a piece or two, but 3 bedrooms, 1 dining room, 1 living room and the kitchen; ALL the furniture is still in the house. Buyer, as one might imagine, is not happy. It happens that the buyer is an investor and is able to have the furniture removed by a hauling company, but a cost. So, buyer asks seller, through the agents, to give a credit for furniture removal. OK, GOOD, UNTIL....

I receive from the listing agent an addendum e-signed by seller today authorizing a credit for removal of furniture; hmm... very curious given that I had to send documents to seller's daughter, seller's daughter had to print docs and deliver to seller for live signatures.

So, I called listing agent and inquired, is the seller with her daughter, at the computer, and did she (the seller) just e-sign this addendum. I get the empty air response.......

What am supposed to do with this? Well, I am not sure how you all would respond, but I for one am not going to accept this. I have decided to postpone closing to Monday to allow for seller to actually sign the addendum. Am I going to the extreme? Maybe. I have no doubt that the seller agreed to this, I have no doubt that the seller is willing and able to sign this addendum, I just don't like the way in which this addendum was magically e-signed, within minutes of delivery to the "seller" when I know as an actual fact that the seller was no where near a computer today.

I am old school, I admit it proudly. At the same time, I love technology, I embrace technology, but I also know that technology can create more problems that it cures if safeguards are not put in place and actually used.

That's my rant for the day. Thanks for listening -:)

Maryland Court of Appeals decision has far-reaching consequences

CHARLENE PERRY — Tue, 05 Feb 2013 14:07:01 EST

On January 29, 2013, the Maryland Court of Appeals handed down its decision in the 100 Investment Limited Partnership v. Columbia Town Center Title Company Case;

The opinion can be found here

The Maryland Land Title Association (MLTA) has issued comments on this case advising that this case may have far-reaching consequences for title agents in Maryland.

The court held that a title insurance agent who conducts a title search or provides a title commitment in a negligent fashion can be held liable for damages by those who reasonably rely on the search or commitment. The Court stressed that the customer's reasonable reliance on the the title commitment was foreseeable, and that, because the commitment erronouesly indicated good title to a parcel previously sold off, the title agent could be held accountable for damages for failing to discover the problem.

What does this mean to Maryland Title Agents?

Agents must be careful in how they define the scope of their work for their customers. In the ordinary course title agents rely upon the title search and examination solely for their use in evaluating whether or not title will be insurable; and it is not intended for use by the consumer for their own purposes. The commitment, on the other hand, is a product that provides the terms and conditions under which the title policy may be issued and is not intended as an opinion of title for the customer's own purposes. This case now makes it necessary for us to educate our consumers as to the purposes of the title search and our commitment to insure. Over the years I have debated with those of you on this forum as well in other forums whether or not the title commitment should be given to the consumer at or prior to closing. I still believe that the consumer has a right to review the title commitment, but now, with this opinion it will become necessary to come to a written agreement with the customer, prior to delivery of the commitmment, as to the purposes of the title search and examination and the commitment to insure.

Suggestions I have heard:

Confirm in writing that the only product your provide is title insurance and that the only services your provide are closing services
Have the customer sign a simple acknoweldgement of these facts and to confirm that, in the event of a title problem, the customer will seek recourse solely through the title policy and not against the agent.
Suggest, in writing, that should more specific title review be required, the customer should hire counsel or other title professionals themselves.
Communicate IN ADVANCE of closing the scope of your undertaking with the customer so that the customer will have the opportunity to engage the appropriate counsel, if desired. (engagement letters and contracts being strongly recommended)

Written communication will be an important part of the documentation in our files from here out as it relates to the way in which we receive orders for, and deliver, title and closing services for our customers. Agents should consider adding exculpatory language in communications and title orders.

I think that all title companies and abstractors doing business in Maryland should pay close attention to this case. Its impact on our liability is HUGE. It is up to you to protect yourself by putting in place some additional safe-guards; some of which are suggested above. I have no doubt that this issue will be discussed at great length in the board rooms of underwriters and title agencies state-wide and that more suggestions will be made.

I will keep my eye on this issue and will offer more insights and possible suggestions to limit liability as it becomes available.

Who is the Owner of Record?

CHARLENE PERRY — Tue, 25 Sep 2012 16:11:19 EST

This is one of the questions that has been coming up more and more lately in my office, and frankly, I am not real sure how to answer it.

Many of us are seeing more and more transactions of late where the Note Holder has agreed to accept a Deed in Lieu of Foreclosure. As is often the case many lenders (Note Holders) are marketing and selling the property through an Asset Management Company in advance of the recording of the actual Deed in Lieu of Foreclosure. In many instances the actual Deed in Lieu is recorded simultaneously with the Warranty Deed from Note Holder to contract purchaser.

BUT.. the Note Holder insists that the Contract of Sale identify the "Seller" as 'the owner of record'. Hmm...So, then in the event the Deed in Lieu has not been recorded at the time of contract acceptance who is the 'owner of record'? If you read the signature line of the 50+ page contract of sale you will find the seller's signature to read something along the lines of ABC ASSET MANAGEMENT CO., on behalf of XYZ BANK. You will generally find a separate addendum to contract similar to an REO Asset Addendum which again is signed by ABC on behalf of XYZ. BUT, you will NEVER see a contract of sale in these cases signed by the ACTUAL "Owner of Record"

Many of the transactions that have crossed my desk lately have been Deed in Lieu transactions and in some instances the contract purchaser is taking a new purchase money mortgage to acquire the property. I have recently had several situations where the buyer's lender has requested an addendum to contract naming the actual "owner of record", but who do we name? The REO Asset Management Company; the Record Owner; or the Note Holder? When it all shakes out and we go to record there will be at least 2 deeds; one, a Deed in Lieu from the Record Owner to the Note Holder and then another from Note Holder to contract purchaser.

Of course our Title Commitment reveals the name of the record owner as well as the fact that we are going to be recording a series of deeds.

I am probably over thinking this, as I often do, but I would appreciate your thoughts about this. So far, we have usually been required to name the Note Holder in the Addendum in order to satisfy the lender's requirements.

IDOT's, DEFAULT AND DOCUMENT STAMPS (TAXES)

CHARLENE PERRY — Thu, 20 Sep 2012 14:23:57 EST

We in the REO arena in Maryland have been awaiting a decision from the Maryland Tax Court relative to the collection of Document Stamps on foreclosed IDOT's. The Maryland Tax Court issued it's decsion on August 28.

An IDOT (Indemnity Deed of Trust) secures a Note to the Lender which note is executed not by the property owner, but rather by the borrower and guarantor. The IDOT is recorded among the land records to secure only the guarantors liability.

For instance, lets pretend that The Preferred Title Group, Inc. (hereafter PTG) takes a loan from a lender and the lender requires security in the form of real estate. PTG does not own real estate, but I, Charlene Perry, do. So, I would offer the real estate as collateral, the loan would be issued to PTG who would be named as the obligor, and I (Charlene), would guaranty the repayment of the Note and use my real estate as collateral for my gurantee. In the event of default the lender would seek recourse from both PTG and me. Ultimately in the event of default the lender would foreclose on the real estate owned by me.

Prior to July 1,2012 there was no requirement to pay documentary stamps (taxes) on the IDOT at the time of recording. (As of July 1, 2012 recordation taxes must be paid on IDOT's securing loans of $1 Million or more) The rule, prior to July 1, 2012, was that when the IDOT was recorded, the debt that it secured had not been "incurred" by the guarantor, and. therefore, no recordation was due until default by the borrower. As time went on and defaults on IDOT's became more and more prevelant some Maryland jurisdictions claimed tha the unpaid recordation taxes due on the IDOT created a lien on the property and that a purchaser at foreclosure sale was required to pay both the unpaid recordation taxes on the IDOT and recordation taxes and transfer taxes on the Trustee's Deed following the foreclosure sale. Essentially, a double dip.

As you might imagine, this created a entirely new category of costs associated with foreclosures in Maryland and many foreclosure attorneys as well as their clients and many REO title agents locally ended up having to pay these double dip fees until some clarity from the Tax Court was provided.

On August 28, 2012, the court held that in an IDOT transaction, although recordation taxes are typically due when the borrower defaults, only the guarantor is liable for such taxes. The Court held that the unpaid recordation taxes due on the IDOT do not create a lien on the underlying property There is no statutory or legal authority that provides that any other party, including the purchaser at a foreclosure sale, must pay the recordation taxes due on the IDOT. The Court held that after foreclosure, the purchaser need only pay the recordation taxes on the consideration paid on the Trustee's Deed.

One local county in particular has been ordered by the Court to refund taxes collected by them on foreclosed IDOT's.

The decision is still subject to review, an appeal can be made to the Ciruit Court.

For now at least those of us working in the REO field know with some clarity what fees we need to collect and present to the clerk of the court when attempting to file our Trustee's Deeds in cases of foreclosure on IDOT's.

A TALE OF ADVERSE POSSESSION ON A TITLE AGENT'S LAND

CHARLENE PERRY — Thu, 02 Aug 2012 12:36:42 EST

As a title agent with more than 35 years experience behind me I have heard many tales of adverse possession. I never thought I would be a victim of adverse possesion myself, but sadly, I find that my property has been used, for some time evidently, by others for their enjoyment, without my knowledge, by actual, open, hostile, and continuous possession I need to file a title claim.

My husband and I share a peaceful home life on our 17 acre parcel of property with many of God's creatures and for the most part they leave us alone and we leave them alone. There have been those rare occassions when we have had to remove (humanly) some of the inhabitants of our little slice of land, but those have been rare over the years.

I personally don't like anything that even closely resembles a mouse, rat or other rodent and in fact I actually have a phobia about such creatures. As such, my husband is constantly taking steps to insure that there are no rodent like creatures near the actual "homestead" which area contains about 2 acres. Naturally, given that the entire property is backed by acres of woods and we have trees everywhere, the squirrels run amok in smallish "herds" but they really don't bother me and are kind of fun to watch.

In addition to the squirrels I have actually given a "pass"" to ONE groundhog, whom I have nicknamed "Blondie" because his hair or whatever it's called is really light. Blondie goes about his day seemingly always alone and he is also kind of fun to watch. Well, now, Blondie has gone "off the reservation" and has evidently been fooling me all along.

A few weeks ago my dear husband advised me that he had to set traps to eradicate what he deemed to be too many groundhogs in and around the homestead area; claiming that they were destructive and that they just had to go. I questioned his position because I had only ever seen Blondie running around alone and had never seen any other groundhogs.

WELL, upon further inspection it appears that Blondie has been abusing my good nature and has in fact been systematically moving his entire family onto the property without my knowledge or permission!!

The family unit which may have started out with only Blondie and his significant other has grown substanatially and now includes not only Blondie, his "wife" and "offspring", but evidently the in-laws with their progeny have decided to take up residence as well. These critters are none too shy and have been blatently and systematically overtaking a 1/2 acre parcel, making it their own and enjoying life to the fullest!!

These critters have never pulled a permit to enable the construction of their homesite, they don't pay me any taxes or rent and they have not requested, nor been granted, an easement into my husband's vegetable garden. I think I have a good claim.

Before I prepare the necessary documentation to prove my claim, my husband is going to attempt to remove all of the illegal occupants by using humane traps and relocating them. As of today's count, he has removed 4 of the interlopers and he estimates there are least 8 more that simply have to go. I can only hope that he leaves my little "Blondie" alone, but I fear that at this point he is not going to be as generous with Blondie as he might have been if Blondie had not tried to pull a fast one on us.

IT'S ALL ABOUT TIMING REALLY

CHARLENE PERRY — Tue, 03 Jul 2012 14:55:55 EST

I swear this is a true story. I cannot make this stuff up, I'm not that imaginative!!

I had a gentleman come into my office yesterday who wanted me to do two simple deeds for him. Or so he thought!! As he and I sat discussing these two properties he needed new deeds on the story unfolds as follows:

The client, John, owned two parcels with a business partner, Frank; John and Frank have owned these properties as joint tenants since the early 1980's. In May,2012, John decided that for estate planning purposes he wanted to sever the joint tenancy and create a tenancy in common with Frank. Frank agreed to this and new deeds are drawn executed and recorded. So, now John and Frank are tenants in common, their partnership remains intact and really nothing much has changed except that John is assured that his children will benefit from this estate planning tool.

AND THEN, in June, 2012, Frank is murdered!! Seriously!! Frank owned several businesses and one of his businesses was robbed, he was killed in the robbery. ENTER THE VULTURES!

Frank was a wealthy businessman with many assets. He leaves no wife or children behind and he leaves no will. His parents have been appointed as Personal Representatives of his Estate and are in the midst of administering the estate; etc. John, who has known these folks for years, goes to them and says, "hey, I need to get these properties back into my name solely, will you sign a Deed over to me? The properties are both encumbered by small mortgages, which I will pay off, I just need a new deed" .

The vultures response; YUP, give me $15K per property and pay off the underlying the debt and the properties are all yours!! "

So now what should have been two simple deeds has resulted in John having to go through actual settlement transactions on both parcels as well as his personal residence to enable him to acquire the entire estate in his own name (he has to borrow money to pay the 30K to the vultures).

Some people!! Even in the aftermath of the death of thier child these vultures are only thinking about MONEY; they have given no consideration to the fact that John and Frank had been business partners for years, that John and Frank had paid down the debt together (as part of their business) on these properties. All they can see are the dollar signs.

I feel for John, I really do. Had he delayed his decision to have new deeds executed he would have been sole owner, he would not have to encumber his personal residence and his family would still have been protected. TIMING, it's all about TIMING