AGENTconnect THE COLORADO AGENCY NEWSLETTER
Issue #15 | April 2017
DRAFTING DOCUMENTS FOR CLOSINGS: A SLIPPERY SLOPE! By: Sandy Plaven, Senior Underwriter
Every day escrow closers prepare certain documents to complete a real estate transaction for buyers or sellers. Have you ever wondered why our industry is allowed to prepare documents such as a Warranty Deed or Special Warranty Deed as required by the contract? Is drafting documents the practice of law? The answer is yes! In 1957, the Colorado Supreme Court determined that real estate brokers and closing and settlement companies were, in fact, engaging in the unlawful practice of law in preparing real estate documents attorneys typically prepare. (See Conway-Bogue Realty Investment Co. v. Denver Bar Association, 135 Colo. 398, P.2d 998 (1957) and Title Guaranty Company v. The Denver Bar Association, 312 P.2d (1957).) Recognizing various reasons why the public has difficulty accessing lawyers, the Colorado Supreme Court decided the public’s best interest would be served by permitting this drafting practice.
the title insurance and real estate industries. Certain types of conveyance deeds can be found under Colorado Revised Statutes C.R.S. 38-30-113 and C.R.S. 38-30-113 (1) (a). When using these approved forms, we are filling in the blanks per the contract. If we draft nonpermitted documents, we step onto a slippery slope of the unlawful practice of law, and it is fraught with danger. We could be held to the high standard of an attorney. When title and real estate professionals abuse this privilege, it is important to remember that the same authority that granted this privilege could take it away. Never prepare courtesy documents! This type of request should always be referred to an attorney for preparation. When you are not sure if the document you are drafting will put you on a slippery slope, please contact your local state underwriter for guidance.
The present practice granted by the Colorado Supreme Court has clear limitations for both
The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. AMD: 04/2017
©2017 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
TOP TIPS
High Liability or Special Risk Authorization Requests
The First American Title Agency Agreement requires policy-issuing agents to seek underwriter approval prior to the issuance of policies that exceed their specified Policy Issuing Authority limit or for transactions that have special risks. Underwriter approval is also needed for any transaction involving a principal of the agency.
Here Are Five Top Tips To Help You Simplify And Streamline Requests For Approval 1.
Know your agency’s contracted Policy Issuing Authority limit. If you are unsure, contact your Agency Sales Representative.
2.
You can submit requests for approval using the Underwriting Request feature in AgentNet® or by sending an email to your local First American Title underwriter.
3.
Provide sufficient paperwork and information to assist the First American Title underwriter in reviewing the request, as applicable: • Authorization Request Form – Available and easy to find in the Content Library on AgentNet • Mechanic’s Lien Risk Assessment (MLRA) information, if mechanic’s lien risk is involved in the transaction • Information about the proposed rate to be charged for the policy(ies) for the proposed transaction • Prior policy, if any
4.
The complete file number on the authority request must match the complete file number on your remittance report.
5.
Sometimes transactions start out below your authority limit, but then the requested policy amount changes at or immediately prior to closing. Under these exigent circumstances, follow the same procedure outlined above and make a notation of POST-CLOSING in your submission.
To View Online Training Videos And Guides Log in to AgentNet> Access the User Guides tab> Select My Files-Underwriting Requests For instructor led training on utilizing the Underwriting Request Feature in AgentNet, contact your local First American Title Agency Sales Representative.
The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.
AMD: American 02/2017 First Title | AGENTconnect | Issue #15 | April 2017
www.firstam.com
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©2017 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
AgentNetÂŽ Content Library ALTA Endorsement The Content Library in AgentNet is a great resource available to agents and provides quick access to bulletins, manuals, guidelines and a library of information. The Content Library is also a great tool for accessing information about ALTA Endorsements associated with specific types of loan and real estate transactions. Log onto AgentNet https://agencymyfirstam.com 1. Enter User Name and Password 2. Select Content Library under the Services tab
3. Type name of ALTA Endorsement (e.g., ALTA 9) in the search field 4. Locate Colorado-specific items by selecting Colorado from the menu on the left 5. Refine the search by using the Sort tab to select Best Match, Name or Date The First American Title ALTA Endorsement Issuing Standards provide details regarding the purpose of the endorsements, whether underwriting approval is required and the steps to follow to issue the endorsement.
News Flash
Colorado Regulation 8-1-4 Effective March 15, 2017 Please familiarize yourself with the definitions and current requirements set forth in Regulation 8-1-4, concerning fiduciary duties. Section 6 outlines new reporting requirements for Underwriters. We appreciate your assistance with responding timely to future requests as we satisfy these new requirements. It is your responsibility to be compliant with all Colorado Regulations. CLICK HERE to access a copy of recently adopted Colorado Regulation 8-1-4 which went into effect March 15, 2017. If you have any questions, please contact Amie Voss at abvoss@firstam.com or your First American Title Agency Team.
First American Title offices will be closed in observance of the following holidays: Memorial Day Monday, May 29th
Independence Day Tuesday, July 4th
Please contact the Colorado Underwriting Department if you have any questions about the issuance of endorsements and the coverage they provide. First American Title | AGENTconnect | Issue #15 | April 2017
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