government affairs blog

The webinar addressed:

• Current Process- getting documents to consumers today
• CFPB intent in proposing new time frames
• Proposed Process: getting documents to consumers three days in advance
• What if there is a variation in actual costs
• Possible impacts on operations

Anyone think that they'll be looking at affiliated businesses in title more closely?

The idea first came under consideration in San Bernardino County, Calif. Venture capital firm Mortgage Resolution Partners is pitching the idea to several cities across the country. Using investor dollars, local governments would seize performing mortgages in negative equity, reduce the principal for the borrower and refinance it into a government-backed loan.  Under the MRP proposal, only loans on which payments were current would be eligible for the program, raising the question as to whether the anticipated discounts on value would result. 

More from Housing Wire

In the recent case of Geraci v. Sunstar, the 2nd DCA held held – properly we believe – that a condominium unit built on a 99 year land lease qualified for homestead protection from creditors.   The court further suggested that what constitutes homestead differs depending on whether the question is protection from creditors or restraint on devise. 

Suggestion has been that the court erred on both of these points – and that a condominium unit built on leased land does NOT qualify for homestead protection.   As you would expect, this was a controversial argument and one with which many real estate practitioners disagreed.   On the other hand, there seems to be a broader consensus that the definition of homestead is the same whether the question is protection from creditors or a restraint on devise. 

The Florida Supreme Court has been asked to accept jurisdiction of this case, so expect to hear more. 

Last session, the law (HB 643) was changed to require attorneys to maintain a separate trust account for real estate transactions and to permit it to be audited by their title insurers.   This law was drafted carefully to comply with Florida Bar Ethics Opinion 93-5.  That opinion validates exactly this practice and recognizes that such audits are necessary to ensure the safety of the client’s funds.   This has been a normal practice for many insurers ever since.    

After the law passed, several questions were raised by some pretty good lawyers.

• Isn’t this a violation of an attorneys duty of confidentiality. – Ethics opinion 93-5 says it is not. 

• Does this mean I have to maintain a separate trust account for each client? – No the express language of the statute says “all funds (plural) received in connection with transactions (plural) … [go] into a separate trust account (singular).

• Does each attorney have to maintain their own trust account – or may all attorneys in a firm use the firm trust account.  

Several of us have suggested that all of these questions are answered by a plain reading of the statute and the existing ethics opinion. They feel there is no need to change anything. 

However, questions have been forwarded to the Florida Bar Ethics committee, and they have asked RPPTL Section for comment and suggestion.  I’m actively participating in the committee working on the RPPTL response. 

We thank the Section for their hard work in support of this critical issue. 

Regulators reviewed only half of mortgage servicers for compliance with national military lending law between 2007 and 2011, according to the Government Accountability Office.

In 2011, two mortgage servicers under investigation from the Justice Department revealed 165 improper foreclosures conducted without a proper court order as required by the Servicemember Civil Relief Act.

Six of 10 other servicers responded to House of Representatives letters shortly after, revealing another 148 improper foreclosures, according to the GAO report.

Banks were found to have charged more than 15,000 servicemembers fees and interest rates higher than the SCRA allowed. JPMorgan Chase refunded roughly 10,000 of them through a settlement last year.

More from Housing Wire

Yesterday, Federal Court Judge Schlesinger dismissed the case with prejudice, pointing out that there is no duty to record every assignment of mortgage, even though the recording acts provide important protections against intervening claims.

A copy of the ruling and order of dismissal is attached.

More from Mortgage Orb.

We expect that our friends at ALTA will be circulating this proposal to make certain the title industry can gather enough information to insure proper compliance.