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The Legal Description Edition
July 7, 2014
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Liability-free: The way for all notaries to be
Posted Date: Monday, June 16, 2014
Complying with state laws, following industry best practices, keeping a journal and maintaining errors and omissions insurance: These are four guidelines that all notaries should follow in order to protect themselves from liability, according to a National Notary Association (NNA) instructor Kathleen Taylor, a presenter at the NNA’s recent annual conference Hyatt Regency Phoenix.
Speaking to hundreds of notaries public during a session called “Four Habits that Protect You from Liability,” Taylor peppered her presentation with cautionary tales of notaries who failed to follow these tips and found themselves in court, incarcerated or stripped of their licenses. Taylor has facilitated notary training for more than 2,000 notaries since 2010, and currently presents live seminars and webinars in California and Arizona.
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New regulations change the game for signing agents
Posted Date: Wednesday, June 18, 2014
The Consumer Financial Protection Bureau’s (CFPB) new and proposed regulations have everyone in a tizzy — including notary signing agents whose roles and obligations are changing in the face of compliance concerns — and at the National Notary Association’s (NNA) annual conference June 1 to 4 in Phoenix, notaries got a first-hand account of what’s really happening in the real estate and financial service industries.
During a session titled “How Regulation and Compliance Affect Signing Agents,” a panel educated notary signing agents on the changes lenders and title companies are making to comply with new federal regulations. The panel, moderated by Chris Sturdivant, director of business development for the NNA, included Ryan Flaherty, vice president of Closing Agent Vendor Management for ServiceLink, a Black Knight company; Sally Freudenberg, vice president and business systems consultant for Wells Fargo Home and Consumer Finance Group; Shawn Murphy, executive vice president of ValuAmerica; Jim Sloan, vice president of Vendor Management for JPMorgan Chase; and Sam Zaki, senior vice president of National Accounts for First American Mortgage Services.
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Does escrowee have duty to lender when not holding lender funds?
Posted Date: Thursday, May 15, 2014
After losing money on a bad real estate investment, the lenders sued the transaction’s escrowee for breach of fiduciary duty. The district court held that Illinois law does not impose a fiduciary duty on an escrowee under the terms of the transaction and granted summary judgment to the escrowee. The lenders appealed to the U.S. 7th Circuit Court of Appeals.
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Homeowner seeks coverage of boundary dispute with U.S. Forest Service
Posted Date: Wednesday, May 7, 2014
After the U.S. Forest Service issued him a letter demanding the removal of structures on his property that were there when he purchased it, a homeowner in Vermont filed a claim with his title insurer. The title insurer denied the claim and the homeowner filed suit against the insurer and the former property owners.
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Is a title company a ‘developer’ or ‘agent’ under ILSFDA?
Posted Date: Tuesday, May 13, 2014
A Minnesota federal judge determined that a title company, which served as an escrow agent in two purchase transactions, was neither a developer nor an agent within the meaning of the Interstate Land Sales Full Disclosure Act (ILSFDA) and therefore granted in part and denied in part the company’s summary judgment motion.
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CFPB orders title company to pay $30,000 for illegal mortgage referrals
Posted Date: Friday, June 13, 2014
The Consumer Financial Protection Bureau (CFPB) ordered a New Jersey company, Stonebridge Title Services Inc., to pay $30,000 for paying illegal kickbacks for referrals.
“Kickbacks drive up the costs of getting a mortgage and put law-abiding companies at a disadvantage,” said CFPB Director Richard Cordray. “The Consumer Bureau will continue to take action against companies that seek to attract consumers through illegal schemes.”
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Title Insurance Assessment Relief Act introduced in New York
Posted Date: Monday, June 23, 2014
A bill designed to afford relief to domesticated title insurers in New York State while continuing to hold them responsible for the premiums assessed by law and used for the operation of the state’s department of financial services, was introduced in the New York State Assembly.
The bill, AB 10090, titled the Title Insurance Assessment Relief Act, is being sponsored by Assembly Member Kevin Cahill, D-Kingston.
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Mechanic’s lien amendment passes Illinois General Assembly
Posted Date: Monday, June 16, 2014
The Illinois General Assembly passed a bill that would amend the mechanic’s lien law by clarifying that an agreement to subordinate a lien under the Mechanic’s Lien Act is against public policy and unenforceable.
The bill, SB 3023, was introduced by Sen. John Mulroe, D-Chicago.
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Rhode Island General Assembly passes CPL legislation
Posted Date: Thursday, June 26, 2014
The Rhode Island General Assembly passed legislation that permits title insurance companies and their agents to issue closing funds protection insurance on residential property closings for property consisting of four units or less.
Under current law, a title insurer is expressly authorized to issue closing or settlement protection to a proposed insured upon request if the title insurer or its title agent issues a preliminary report, binder or title insurance policy.
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Wisconsin bulletin disapproves blanket exceptions in title policies
Posted Date: Thursday, June 26, 2014
The Wisconsin insurance commissioner issued a bulletin informing title insurers that his office has received a complaint about title companies using blanket exceptions in their title insurance policies. He also informed title insurers that beginning June 24, he would be disapproving title insurance forms that include these exceptions.
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Nevada Division of Insurance launches title rate comparison tool
Posted Date: Monday, June 23, 2014
The Nevada Division of Insurance announced the launch of a new title insurance and escrow rate comparison tool online at titlerates.doi.nv.gov. The purpose of this tool is to help consumers make educated title insurance decisions when they are purchasing or refinancing a house.
The rate comparison tool is the key component of a title insurance educational program designed to educate Nevada consumers about title insurance products and the consumer’s right to select a title agency and title insurer.
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Stewart settles Cuesta litigation
Posted Date: Monday, June 16, 2014
Stewart Information Services Corp. announced that a settlement involving approximately 500 plaintiffs representing more than 90 percent of the total number of plaintiffs has been reached, pending execution of a final settlement agreement, in the Cuesta Litigation in California.
Under the terms of the settlement, Cuesta Title Co., Stewart Title of California Inc. and Stewart Title Guaranty Co. have agreed to pay approximately $10.53 million to resolve the state court cases with the settling plaintiffs.
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Locke Lord gains title industry veteran
Posted Date: Wednesday, June 18, 2014
Locke Lord LLP has strengthened its financial services presence with the addition of Timothy Kemp as partner in the Corporate and Transactional Department, the Consumer Finance Practice Group and the Regulatory and Transactional Insurance Group in the firm’s Chicago office.
Kemp joins Locke Lord after a 20-year career with the Santa Ana, Calif.-based First American Financial Corp., where he served most recently as deputy general counsel.
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Chicago woman found guilty of filing false liens against federal employees
Posted Date: Thursday, June 26, 2014
After two days of testimony, a federal jury sitting in Chicago, Illinois has returned a verdict finding Cherron Marie Phillips, who also goes by the name of “River Tali Bey,” 43, guilty of knowingly filing false maritime liens — each in the amount of $100 billion — against the property of current and former federal employees, U.S. Attorney for the Southern District of Illinois Stephen Wigginton, announced.
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Title agent, mortgage broker, others indicted for mortgage fraud
Posted Date: Thursday, June 26, 2014
A six-count indictment was unsealed this morning in federal court in Brooklyn charging mortgage broker Alex Barrett, property manager Barthelemy Adjavehoude, title agent Michelle Baker, property manager and self-described foreclosure specialist James Bayfield, and property managers Samuel Terrell Bell and Dirk Hall with engaging in a bank and wire fraud conspiracy to steal millions of dollars from financial lending institutions. Defendants Adjavehoude, Baker, Bayfield, and Bell were arrested and arraigned before U.S. Magistrate Judge Lois Bloom at the U.S. Courthouse in Brooklyn, N.Y. The defendants face penalties of up to 30 years’ imprisonment if convicted.
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Escrow company controller pleads guilty to mortgage fraud
Posted Date: Monday, June 23, 2014
An escrow company controller from Yorba Linda, Calif., pled guilty to three counts of wire fraud in connection with a mortgage fraud scheme. He admitted to preparing fraudulent HUD-1 Final Settlement Statements that reflected false sales prices and that indicated down payments had been made by the nominee buyers when in fact they had not.
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Does Henson decision mean MSAs now illegal?
Posted Date: Monday, June 23, 2014
Expert attorneys who spoke at October Research, LLC’s 2014 National Settlement Services Summit (NS3) said the answer to that question is yes. When a federal district court decided in the case of Henson v. Fidelity National Financial Inc. that the phrase “for services actually performed” contained in RESPA Section 8(c)(2) refers specifically to “settlement services,” it basically held that marketing services agreements (MSAs) are illegal. It is unlikely, however, that the interpretation will be upheld.
“Unfortunately, we now have a situation where a court is determining the meaning of the word “services” in Section 8(c),” said Jeffrey Arouh, a partner at McLaughlin & Stern LLP during an NS3 session covering affiliated business arrangements and MSAs. “And, for better or worse, what the court has said in Henson was that the term ‘services’ in Section 8(c)(2) exempts payment for settlement services actually performed.”
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