VOLUME VIII
An Underwriting Newsletter by First American Title
PROPERTY
PROFESSOR GET TO KNOW
CAROLINE VELAZCO SENIOR UNDERWRITING COUNSEL
CLOSING CORNER
CLOSING TRANSACTIONS FEDERAL TAX PAYMENTS AND MORE
RON IN FLORIDA
What is it? What are the requirements? FLORIDA LEGISLATIVE
UPDATES
DEATH OF THE
LIBOR
www.firstam.com
In This Issue: PAGE
FROM THE EDITOR’S DESK LEN PRESCOTT VP, Florida State and Regional Counsel
How is your business doing through the first half of the year? For our part, we had predicted that business would be softer. According to a recent study by the National Association of REALTORS®, the real estate industry accounted for $227.3 billion or 21.9% of the gross state product for Florida in 2018. This financial performance is slightly down but still close to the record financial performances of prior years. Specific to title premiums, the American Land Title Association reports premiums in the first quarter of 2019 were down 5% nationally from the first quarter of 2018, with claims up 7.4% for the same period. On a more positive note, Florida became the 2 largest state for title industry premium volume. I’ve been predicting we would overtake California for the number two spot in the nation (Texas is #1) but didn’t think it would happen so quickly. Florida will need to keep this lead through the rest of the year to be big industry-wide news, but I think we can and will do it!
TITLE
3
Remote Online Notarization in Florida
5
The Death of The London Inter-Bank Offered Rate (LIBOR)
7
Reverse Mortgages
9
The Property Professor
10
Show Me The Credits!
11
Closing Corner: Federal Tax Payments, Unsecured Debt and Credit Cards
11
In the Know
12
2019 Florida Legislative Update
13
Case Law Updates
15
Underwriting Spotlight: Caroline Velazco
16
Florida Statewide Underwriting Team
nd
Even more important to us than statistics and how Florida will rank nationally, is how your business is doing. We are optimistic about the second half of 2019. As of this writing, the stock market is displaying all-time highs, and the Fed has clearly signaled their support for a rate cut. A half-point rate cut (or more) could be seen by year’s end. If this happens at the Fed’s next meeting on July 30-31st, it would be the first time the rate has been cut since 2008. Importantly, these cuts would be precautionary to “sustain the expansion.” A strong economic backdrop, low unemployment, slowing real estate price appreciation, increased supply, and a continued pullback in mortgage rates bodes well for title transactions in Florida. During the second half of the year, we will continue to focus on delivering innovative underwriting solutions for you to be more successful and make those national statistics truly meaningful. Please let us know how we can meet your changing needs with topics such as Remote Online Notaries, the changes to LIBOR discussed in this newsletter or any other challenges. Thank you for being our agents, our partners and our friends. You’re an important part of what makes First American Title a great place to work!
We Want Your Insight! Your insight is valuable to the Florida Underwriting Team! If you would like to contribute to the Florida Underwriting Newsletter, or if you have any comments or suggestions for topics you would like to see in our newsletter, please submit your ideas to Jim Kearn, at JKearn@firstam.com. We look forward to your input!
Best regards,
Len Prescott
First American Title | The Florida Legal Eagle
2301 Maitland Center Parkway, Suite 450, Maitland, FL 32751 407.691.5295
EXECUTIVE EDITORS:
Len Prescott | Alan McCall | Jim Kearn
MANAGING EDITOR: Jim Kearn
First American Title Insurance Company, and the operating divisions thereof, make no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. First American, the eagle logo and First American Title are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. This document is for informational purposes only and is not and may not be construed as legal advice. No person or entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such person or entity should consult with an attorney prior to embarking upon any specific course of action. ©2019 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
REMOTE ONLINE NOTARIZATION IN FLORIDA What is it? What are the requirements? And when can I use it? Jennifer Jones Bloodworth, Esq., Senior Underwriting Counsel
On June 7, 2019, Florida Governor Ron DeSantis signed into law House Bill 409, Electronic Legal Documents (now Florida Law 2019-71). Among other things, this new law will authorize the use of and set forth requirements for remote online notarization (RON) by Florida notaries public. First American Title has worked closely with the Real Property, Probate and Trust Law Section of the Florida Bar (RPPTL), Florida Land Title Association (FLTA), and other industry stakeholders on this bill for several years. We now look forward to working closely with you, our policy issuing agents, as we take this next technological step in the world of electronic transactions.
What is RON?
Under the new Florida law, RON is referred to as online notarization and is the performance of a notarial act while the notary public and the signer, or principal, are not physically in the same room. Instead, these parties are connected via audiovisual communication technology that allows them to see, hear, and communicate with each other at all times.i The notary public performing such act is called the online notary public.ii
How Does an Online Notary Public Check ID?
Traditionally, when the principal is unknown to the notary public, the principal provides evidence of identification and, if such evidence is satisfactory, the notary public performs the notarial act. Under the new law, when the principal and notary are remote from each other, a principal’s identity must be affirmed through multi-factor authentication, which is the process of evidencing identity through multiple means. These means include identity proofing and credential analysis.
Identity Proofing
Identity proofing is the “process or service…in which a third party affirms the identity of an individual through use of public or proprietary data sources, which may include by means of knowledge-based authentication or biometric verification.” iii Currently, the technology for biometric validation of identification is not available, so Florida will initially rely on knowledge-based authentication (KBA). Most other states with RON statutes also rely on KBA, which is a method of proving one’s identity by correctly answering questions that are pulled from public and proprietary data sources (such as credit history). Most other states with RON statutes also rely on KBA. The answers to the questions are intended to be easily known by only the principal and responded to in a short amount of time. They sometimes are referred to as out of wallet questions, because someone would not be able to answer them if he or she had access to the principal’s wallet. In Florida, the principal must be presented with at least five questions with at least five multiple-choice answers. The principal must get 80 percent correct within two minutes. If the principal fails, the principal will have one additional attempt with, at least, two new questions.iv
First American Title | Florida Legal Eagle | Volume VIII
Credential Analysis
In addition to proving identity through KBA, the principal must provide an electronic copy of a valid form of identification, or credential, that is of sufficient quality to enable the online notary public to identify the principal. This means that the copy must be clear enough for the online notary public to identify the principal and to affirm the authenticity of the credential itself using technology that analyzes visual or security features present on the credential.v
Witnesses
Under the new law, witnesses can be located remotely. The identity of a witness who is remote from the principal must be verified in the same manner as the principal’s identity and must verbally confirm he or she is a resident of and physically located within the United States or a territory of the United States at the time of witnessing. If the witness is in the physical presence of the principal, the witness must confirm his or her identity by stating his or her name and current address on the audio-video recording as part of the witnessing act.vi
RON Service Providers
Importantly, the new law contemplates identity proofing and the technological analysis of each credential will be performed by a third-party service provider, eliminating any need for an online notary public to possess the technology to satisfy these requirements directly. The statute defines such third parties as RON service providers and sets forth specific requirements for these services and providers.
What about Other Security Measures for RON?
In addition to the preceding requirements for authenticating the identity of the principal and any witness, the new law provides for additional security measures that include, but are not limited to, the following:
• Uninterrupted and Recorded Audio-Visual Communication The principal, any witness, and the online notary public must be able to see, hear, and communicate with each other by means of technology that allows real-time, twoway communication at all times. The notarial act must be recorded and retained in its uninterrupted and unedited state for at least ten years.
• Tamper-Evident Technology Remotely online notarized documents must be secured with tamper-evident technology. This type of technology essentially locks an electronic document in the form in which it was notarized. Unlike paper documents, nothing in an electronic document with tamper-evident technology can be modified without detection. As with identity proofing and credential analysis, the new law contemplates these, and most other, security measures will be performed by a RON service provider.
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REMOTE ONLINE NOTARIZATION IN FLORIDA What is it? What are the requirements? And when can I use it?
What are the Qualifications for becoming an Online Notary Public?
The registration and qualification requirements include, but are not limited to, the following:
• Registration. First, one must be appointed as a Florida
notary public under part I of Chapter 117, F.S., a civil law notary under Chapter 118, F.S., or a commissioner of deeds under part IV of Chapter 721, F.S. Once appointed, one must register with the Department of State (DOS) by completing the registration process set forth in the new statute.vii Currently, the DOS must still create the registration process, forms, and rules. Keep an eye out for future communications once registration is available.
• $25,000 Bond and E&O Coverage. An online notary public
must obtain a bond in the minimum amount of $25,000 payable to any individual harmed as a result of an online notary public’s breach of duty. An online notary public must also be covered by an errors and omissions insurance policy in the minimum amount of $25,000.viii
• Educational Course. An online notary public must complete
a two-hour course addressing the duties, obligations, and technology requirements for online notaries public offered by FLTA; RPPTL; the Florida Legal Education Association, Inc.; the DOS; or an approved vendor.ix
• Electronic Journal. An online notary public must create and
Can I Use RON Now?
Not quite yet. The effective date for much of the new law (including the new curative provisions and notary blocks) is January 1, 2020.xiii However, it is worth noting that the practical use of RON may be a later date. One of the reasons is that the DOS must still (1) create processes, forms, and rules necessary to apply for and be registered as an online notary public; and (2) adopt rules establishing standards for tamperevidence technologies. Accordingly, please be advised our current position on the acceptance of remotely notarized documents from other jurisdictions remains as stated in prior communications. First American does not accept remote notarization of documents by non-Florida notaries for purposes of insurability in Florida. See FL-2017-0002-Standard and NA-2018-12-Standard.
Final Note: This article addresses the provisions of the new law
that are most relevant to insured real estate transactions. There are different requirements and restrictions for the remote online notarization and witnessing of certain wills, trusts, powers of attorney, and other estate planning documents. Because insured real estate transactions may involve one or more of these documents, these requirements are important and must be reviewed, but are not within the scope of this article. For the full text of the new law, visit: http://laws.flrules.org/2019/71.
maintain an electronic journal. In addition to numerous other requirements set forth in the statute, the online notary public must ensure the electronic journal is securely stored under his or her sole control and stored for at least ten years after each notarial act.x
• Identification of RON Service Provider. An online notary
public must identify to the DOS the RON service provider the online notary public intends to use for online notarial acts.
What Else Should I Know about the New Law?
• Curative Statute for Acknowledgments. The curative statutes
for defective acknowledgments are revised to include that documents with a failure of or missing acknowledgment are cured within the applicable statutory time frame.xi
• Disclosure of Location in Notary Blocks. All notaries public, traditional and online, must disclose whether the notarial act was performed in the physical presence of the principal or remotely by using the new certificates of acknowledgment and jurats that comply with this disclosure requirement.xii
F.S. §117.201(9) F.S. §117.201(10) iii F.S. §117.201(7) iv F.S. §117.295(3)(a) v F.S. §§ 117.201(3) and (6), and 117.295(3)(b)
F.S. §117.285 F.S. §§117.225 viii F.S. §§117.225(6) and (7) ix F.S. §§117.225(2) and §117.295(6) x F.S §§117.245 and 117.255
F.S. §§ 95.231 and 694.08 F.S. §117.05 xiii T he effective date for the online execution and notarization of electronic wills and certain other probate instruments is July 1, 2020.
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First American Title | Florida Legal Eagle | Volume VIII
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THE DEATH OF THE LONDON INTER-BANK OFFERED RATE (LIBOR) Ed Hamann, Esq., Senior Underwriting Counsel
LIBOR is a staple of any mortgage loan involving a variable rate, whether residential or commercial. It is calculated and published daily in five currencies and seven different maturities, and generally used as a reference rate for financial transactions in excess of $200 trillion. It is estimated as much as two-thirds of all variable rate mortgages in the United States are linked to LIBOR. Prior to the great recession, LIBOR had generally tracked other market indicators, but the extreme economic pressures exposed how easily this rate could be manipulated.1 The many fundamental weaknesses in LIBOR caught the attention of worldwide regulators and the press beginning in 2012. As a result, it is widely expected that after December 2021 LIBOR will not be available as an index rate (LIBOR Critical Date). To understand this development, a brief explanation and history of LIBOR is necessary. Further, it is critical to understand what is happening now in terms of a replacement rate and the impact that these changes will have on present and new LIBORbased transactions leading up to and beyond the LIBOR Critical Date.
Brief History of LIBOR and its Adulteration
The origin of LIBOR is attributed to an $80 million syndicated loan in 1969 in favor of the Shah of Iran. In order to comprehend LIBOR as an index rate, you must understand it is based on the answer by large global banks to the following question: “At what rate could you borrow funds, were you to do so by asking for and then accepting interbank offers in reasonable market size prior to 11 am?”2 Currently, U.S. based LIBOR is based on the submissions of 16 panel banks with the top and bottom four submissions being dropped and the remainder being averaged. Prior to 1986, the answer to this question was unregulated and essentially on the honor system. In 1986, the British Bankers Association recognized the risk of manipulation and assumed the role of self-regulation of LIBOR. In 2012, the Financial Conduct Authority (FCA) assumed the regulatory role becoming the first governmental regulator. All of this arose out of probes into many large banks that were misreporting their LIBOR submissions. These probes resulted in very large settlements of several major banks totaling more than $3.5 Billion both in the UK and the U.S that were widely reported in the press. In the summer of 2014, the Financial Stability Board, a global financial watch group, recommended LIBOR be replaced. By November 2014, the Federal Reserve and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (ARRC) to identify a LIBOR alternative. In June of 2017, the ARRC recommended the Secured Overnight Financing Rate (SOFR) replace LIBOR. The next month the Chief Executive of the FCA announced it would no longer compel the panel banks to make LIBOR submissions after 2021, and further predicted the disappearance of LIBOR as a question of when and not if. Since the summer of 2017, the ARRC has been aggressively working on a transition plan from LIBOR to SOFR.
First American Title | Florida Legal Eagle | Volume VIII
What is SOFR and Why Was it Chosen as a LIBOR Alternative?
A principal goal of the ARRC was to find the most robust rate possible to help prevent manipulation and better reflect the financial markets as a backdrop for lending. The ARRC stated, “SOFR is a good representation of general funding conditions in the overnight Treasury repo market.”3 SOFR is a rate that is currently published by the Federal Reserve Bank of New York to reflect the cost of overnight borrowing on a secured basis using U.S. Treasury Securities. In other words, it is a rate based on actual overnight transactions totaling more than $700 billion daily. The daily volume of transactions based on the interbank offers that are the source of LIBOR never exceed more than $800 million. In a nutshell, ARRC selected an alternative rate already heavily used, based on secured transactions and under the supervision of the Federal Reserve. The ARRC has suggested SOFR can be used currently with a simple or compound averaging of selected historical periods.4 It also recognizes many lenders are used to handling forward-looking terms such as those reported for LIBOR, so there is a process of transition from LIBOR to SOFR that involves creating a SOFRbased futures market among other steps, hereinafter the (LIBOR Transition Plan).
What Can We Expect from the LIBOR Transition Plan?
The first and biggest step is currently underway: the creation of a futures market based on SOFR reported transactions to help with the transition. This is an important step in facilitating the transition from SOFR, as a statement of short term general market conditions based on daily transactions, to a rate or index that resembles what has been customary in the marketplace. The SOFR-based futures was launched in April 2018 and ARRC has reported that as of the end of April 2019 the cumulative value of all open and expired SOFR-based futures transactions has exceeded $9 trillion. Secondly, since LIBOR is based on unsecured transactions and SOFR is based on secured transactions, this is, to a certain extent, a comparison of apples and oranges resulting in the spreads being fundamentally different. A third major consideration is SOFR is the U.S. solution to the LIBOR Critical Date, while the rest of the major market countries are selecting their own alternative rate, some based on secured transactions, but most remaining with a reference rate based on unsecured transactions. The last major element in the LIBOR Transition Plan is the need to revise contracts to allow for an alternative reference rate when LIBOR is no longer available, generally referred to as “fallback language.” In the last year, ARRC has convened several consultations with market participants to propose fallback language and this has happened for syndicated loans and floating rate notes. Additional similar guidance will be issued for bilateral business loans, and securitized loans. The current proposals for fallback language have taken two approaches: 1) a hard and fast switch to an alternative rate upon a triggering
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THE DEATH OF THE LONDON INTER-BANK OFFERED RATE (LIBOR) event such as the LIBOR Critical Date or some other predefined event; or 2) a pre-defined and streamlined approach for amending loan documents as to an alternative rate that can be triggered upon the occurrence of pre-defined events, including but not limited to, a borrower election and LIBOR Critical Date, collectively referred to as fallback approaches.
What To Keep an Eye Out for as LIBOR Critical Date Approaches?
An immeasurable amount of existing LIBOR-based mortgage loans are set to expire after the LIBOR Critical Date without adequate provisions for the disappearance of LIBOR as the core term. It is easy to imagine that this can lead to a perfect storm for any or all of the following: mortgage modifications, refinances, or defaults and litigation. In any event, this will likely drive an increase in volume of lending transactions whether via modification or new loans. The upcoming switch away from LIBOR will drive many questions and issues that will need to be addressed by legal professionals. Interestingly, we continue to see many new loan transactions and amendments that still reference LIBOR without any fallback language to account for the end of LIBOR. This is especially the case with local and regional lenders who are not as well-connected with global financial markets and are simply unaware of the LIBOR Critical Date. This may be an area for attorneys to educate and counsel their clients, whether they are lenders or borrowers. Will mortgage lenders adopt the current SOFR Index or a SOFR futures-type rate that is actively being matured as the replacement rate? Or will other more conventional mortgage lending rates be adopted, such as the Prime Rate? If a SOFRtype rate is adopted by mortgage lenders, what will be the spread adjustment considering the fundamental difference in the basis of LIBOR as compared to SOFR? Which of the fallback approaches and fallback language will be best suited for mortgage lenders, both commercially and residentially? In cases of litigation, what will be the impact, if any, on the priority and enforceability of all or a portion of the interest on the loan once LIBOR is no longer available? Can lenders modify this term unilaterally?
How Does This Impact Title Underwriting and Premiums?
Beyond the legal and practical matters that will need to be addressed as the LIBOR Critical Date approaches, how will all of this affect you as a title-issuing agent? First, get ready for a lot of requests for endorsements to loan policies as LIBOR loan mortgages are modified! Two immediate issues to consider when these mortgage modifications are requested to be insured are: 1) premium calculations; and 2) potential change or loss of priority. In terms of premium, it is very likely this type of a change in a mortgage modification will trigger substitution loan rates on the unpaid principal balance of loans as provided for in the Florida Administrative Code. This this type of change does not appear within the eight safe harbors.5 Make sure to contact your favorite First American Underwriter if you feel the existing LIBOR Loan in your transaction has sufficient fallback language so the general rule of substitution loan rates being triggered may not apply. Secondly, as has been discussed, any switch in the calculation of interest away from LIBOR to any alternative, whether it is SOFR or any other alternative should be viewed as a material change to the mortgage that implicitly raises questions about a risk of loss or change in priority of the mortgage. Consequently, any intervening mechanic’s liens, judgment liens and other similar title matters that have appeared of record since the original mortgage will need to be underwritten with proper requirements or new exceptions. It is difficult to fathom the full scope of the questions and issues that may arise for lenders, legal practitioners and title professionals What is certain is there is a sea of change coming and our underwriters are highly educated on this upcoming change and are ready to help you with the activity that is certain to follow as we approach the LIBOR Critical Date.
Beyond the legal and practical matters that will need to be addressed as the LIBOR Critical Date approaches, how will all of this affect you as a title-issuing agent? First, get ready for a lot of requests for endorsements to loan policies as LIBOR loan mortgages are modified! 1
2 3 4 5
David Hou and David Skeie, LIBOR: Origins, Economics, Crisis, Scandal and Reform, Staff Report No. 667 March 2014. See https://www.newyorkfed.org/medialibrary/media/research/ staff_reports/sr667.pdf Id. at Page 2. Alternative Reference Rates Committee Frequently Asked Questions Version January 31, 2019. Question 5. https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/ARRC-faq.pdf The Alternative Reference Rates Committee, A User’s Guide to SOFR. April 2019. See https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/2019/Users_Guide_to_SOFR.pdf See Fla. Admin. Code R. 69O-186.0059(13)
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MORTGAGE$
Trends, History, Features, and Title Insurance Guidelines Jim Kearn, Esq., Senior Underwriting Counsel
Trends
There are over 77 million baby boomers, those born in the immediate post World War II era from 1946 through 1964, in the U.S and approximately 10,000 baby boomers reach retirement age every day. This is the first modern generation to go-it-alone for retirement planning, i.e., to have nothing more than social security. More than 80% of U.S. companies furnished pensions in 1971, and now, less than 20% do so (although this is offset somewhat by the rise of 401k plans, ESOPs, IRAs and the like.) 59% of boomers who are parents are still supporting their adult children, ages 18-39, due in part to record-high student-debt levels and a difficult job market for college graduates over the last decade. Living longer equates to needing longer health term care, and for medical insurance to supplement Medicare. These financial trends are causing many boomers to realize their retirement planning is inadequate and turn to their largest ‘piggy bank’ for supplemental income, their home and its equity, and a reverse mortgage.
History
Reverse mortgages are over a half-century old. The first one was crafted and offered by the Deering Savings and Loan in Portland, Maine, to enable the beloved widow of the local high-school football coach to remain in her home for the rest of her life. Reverse mortgages were relatively few through the late 1980s. Government studies done in conjunction with the tax law changes in 1986, however, confirmed seniors preferred, and health care costs were less, when seniors could spend their final years and be cared for at home. President Reagan facilitated the broad acceptance and growth of reverse mortgages by signing the Housing and Community Development Act of 1987 into law. The new key feature in the law that proved to be the catalyst for the reverse mortgage industry was to have FHA insure reverse mortgages, and to enable the Federal National Mortgage Association to purchase those FHA insured reverse mortgages to provide liquidity to the reverse mortgage program.
Terms
To better understand reverse mortgages, it helps to first define lending terminology when speaking of mortgages. The traditional mortgage most are familiar with is the “Forward Mortgage” where the lender furnishes the full amount of the loan to the borrower/mortgagor at the outset. The borrower/mortgagor gives a mortgage back to the lender to secure the repayment of the loan, and pays back the loan, usually in monthly installments, which can range from 5 to 30 years. The outstanding principal balance decreases as payments are made. If the borrower defaults, the lender can foreclose, and the borrower is possibly liable for a deficiency judgment. With the reverse mortgage, a mortgage is still given by the borrower/mortgagor at the outset to the lender, but nothing is necessarily paid by the lender to the borrower at the outset. Over the life of the loan, the borrower draws down the amounts available under such mortgage, with the outstanding balance increasing over the life of the loan rather than decreasing as with
First American Title | Florida Legal Eagle | Volume VIII
a forward mortgage, hence the phrase “reverse mortgage”. Unlike a forward mortgage, the mortgagors under reverse mortgages are never liable for a deficiency judgment.
Types of Reverse Mortgages
Many types of reverse mortgages are offered in the marketplace, but they generally fall into two distinct categories, proprietary and the Home Equity Conversion Mortgage (HECM, pronounced HEKUM). As the name implies, proprietary mortgages are offered by private lenders, with no government backing. The bank underwriting for these loans is complicated. Like life insurance underwriters, the reverse mortgage lender calculates the borrowers’ probable life expectancy, the amount of the monthly or periodic payment the borrower wants, and at what point in the borrower’s life does the borrower want the payments to start, to supplement their income. The younger the borrower is, the longer the stream of payments, and hence, the smaller the amount of the payments will be, all based on the value of the house. The fees paid upfront are usually exorbitant, often several points more than those charged for forward mortgages. The far more popular type is the HECM Mortgage, which accounts for nearly 95% of the reverse mortgages in the marketplace. The Home Equity Conversion Mortgage is insured by the Federal Housing Administration (FHA), a branch of the U.S. Department of Housing and Urban Development (HUD). Since it is backed by the federal government, it eliminates a considerable amount of risk for the proprietary lender, who often builds ‘cushions’ in the up-front fees to the borrower, in the event the borrower outlives the projections, and continues to draw payments longer than the lender anticipated. Since the federal government started insuring these loans in the 1980s to enable seniors to age in place at home, HECM mortgages have grown from a paltry 197 loans in 1990, to over 55,000 in 2017. The reverse mortgagor can choose the type of payments he, she, or they want. The choices include a Line of Credit, Lump Sum, Term, or Tenure. As the term implies, the Line of Credit works just like a line of credit. After closing on the reverse mortgage, that credit facility remains in place for the borrower to draw down the amount they want, at the times they want, to plan and provide for long term care, a dreaded disease, or to supplement the drop in social security upon the death of a spouse. Some even use the Reverse Mortgage over the Home Equity Line of Credit (HELOC) due to a feature in this credit product. Unlike a HELOC, if the borrower doesn’t draw down any funds after closing, the amount that is available to be drawn down, increases year by year. In fact, the amount of the increase has usually been .5% points more than the interest on the amount actually borrowed. Another type of reverse mortgage is the Lump Sum. The borrower can simply elect to acquire the desired funds in a lump sum, much like a forward mortgage.
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MORTGAGE$ A Term reverse mortgage is a set amount for a set term. Payments under this type of reverse mortgage tend to be relatively higher because the risk attendant to how long a lender must pay out is eliminated by agreeing to a set term of payments. Finally, there is the Tenure reverse mortgage. Like a tenured professor at a university who may remain and teach as long as he or she likes, the tenure reverse mortgage pays out over the life of the mortgager. Because lenders have to calculate and provide for an unknown and longer payout period, funds available under these tend to be relatively smaller than term reverse mortgages. There are other options, such as the modified-term and the modified-tenure plans which are beyond the scope of this article. The maximum amount that can be borrowed under a HECM Mortgage is $726,525 for 2019, and that upper limit varies by counties in Florida. FHA sets the amount annually.
Qualifications for a Reverse Mortgage To qualify for a reverse mortgage, all borrowers must be 62 years or older. If one spouse is 64 and the other is 61, and they hold title as tenants by the entireties, they cannot obtain a reverse mortgage. The reverse mortgage must become a first mortgage against the property which is the mortgagor’s primary residence. If there is a mortgage presently against the property, a reverse mortgage can be used to pay off and satisfy that loan, and all prior liens and encumbrances. An attractive feature of a reverse mortgage is it can be used to purchase other property, so long as the reverse mortgage is given against the mortgagors’ principal residence. For the baby boomer who always hoped to have a getaway second home in the mountains, or a cabin on a lake, a reverse mortgage can be a useful financial tool to help him or her realize that dream.
Title Insurance Issues with HECM Reverse Mortgages 1. Two Satisfactions are needed!
As with a forward mortgage, the reverse mortgage can be paid off, satisfied, and discharged at any time. What’s unique about HECM reverse mortgages, however, is two satisfactions are needed. Here’s why. With the HECM mortgage, the borrower signs a note, both with the private ‘lead’ lender and then a second note, for the same total amount with the Secretary of Housing and Urban Development. More specifically, the first note is expressly inked with the second note in Paragraph 13, which provides in pertinent part as follows:
“13. Relationship to Second Security Instrument. (a) Second Security Instrument. In order to secure payments which the Secretary may make to or on behalf of the Borrower pursuant to Section 255(i)(1)(A) of the National Housing Act and Loan Agreement, the Secretary has required Borrow to execute a Second Note and a Second Security Instrument on the Property.
(b) Relationship of First and Second Security Instruments. Payments made by the Secretary shall not be included in the debt under the Note unless:
Trends, History, Features, and Title Insurance Guidelines Similarly, the second note and second mortgage is in favor of the Secretary of Housing and Urban Development, and contains corresponding language in Paragraph 13 as follows:
“13. Relationship to First Security Instrument. (a) Second Security Instrument. In order to secure payments
which the Secretary may make to or on behalf of the Borrower pursuant to Section 255(i)(1)(A) of the National Housing Act and Loan Agreement, the Secretary has required Borrow to execute a First Note and a First Security Instrument on the Property.
(b) Relationship of First and Second Security Instruments.
Payments made by the Secretary shall not be included in the debt under the Note unless: (i) This Security Instrument as assigned to the Secretary; or (ii) The Secretary accepts reimbursement by the Lender for all payments by the Secretary, including interest on the payments, but excluding late charges paid by the Secretary, shall be included in the debt under the Note.” In short, since there are always two notes and two mortgages in HECM Reverse Mortgages, two satisfactions are always needed. Also, depending on the facts of each loan, the Secretary of Housing and Urban Development may have made payments to or on behalf of the mortgagor, purusant to Paragraph 13 of the note as cited above, quite apart from the private lender. Those funds are due with the amount due to the private lender. In asking for payoff information and an estoppel letter, it is imperative to ask for all sums due under the loan, and all additional amounts that may be due to the Secretary.
2. Death
As long as the taxes and insurance are paid on the property annually, and the other covenants and duties in the mortgage are observed and discharged, the mortgagee cannot foreclose on the reverse mortgage. The last of the two mortgagors to live can remain on the property until their death. At death, their heirs can acquire the property if the heirs pay off the reverse mortgage, just as with a forward mortgage. Or, the heirs can decide to convey title to the property to the lender. In such case, the estate and the heirs do not have to pay anything more, and there is no deficiency judgment against anyone.
In summary, when insuring property that has a reverse mortgage in the chain of title: • Make sure the payoff from the lender includes all amounts that may also be due the Secretary of HUD • Obtain two satisfactions • As with a HELOC, make sure there have been no additional ‘draws’ after payoff information has been obtained • Make sure all checks, credit or ATM cards associated with the reverse mortgage are surrendered at the closing
(i) This Security Instrument as assigned to the Secretary; or (ii) The Secretary accepts reimbursement by the Lender for all payments by the Secretary, including interest on the payments, but excluding late charges paid by the Secretary, shall be included in the debt under the Note.”
First American Title | Florida Legal Eagle | Volume VIII
Page 8
THE
PROPERTY
PROFESSOR Alan McCall VP, Regional Underwriting Counsel, FL, PR, USVI
Dear Property Professor,
My closing is in an hour, but we just discovered the seller’s 20-year-old deed is wrong. No one can find the prior owners. This transaction is from our best real estate agent. My boss says he would never want bad title to stand in the way of a good closing. What should I do? The problem is the legal description. It’s a residential property, platted property but the deed misspelled the subdivision name, i.e. Happy Acres (they used a ‘k’), left off the block (blk 8) and the metes and bounds describing the subdivision lot has a missing call. That’s three errors in just one deed! A correction deed is not possible, and a quiet title suit is too time consuming. So, can we close?
– Frazzled in Fruitland
Dear Perplexed,
Title Standard 21.1 sets out the standard for sufficiency of property descriptions. That is, if a surveyor can locate the property using the rules of surveying, then the description is not wrong from a title perspective. Or, said another way, “not all typos are title problems.” While speaking to you by phone, I learned the seller is conveying lot 32 in a subdivision that has 4 lots per block numbered sequentially so no block has the same numbered lot. There is only one lot 32 and it happens to fall in block 8. You told me the old deed to the seller used the correct reference for the plat of subdivision, and we are sure there is no other subdivision with the same name - no matter how it is (mis)spelled. Therefore, these errors will not prevent the surveyor from locating the lot. Next, while the metes and bounds following the description is defective, we don’t need it since we can locate the lot without it. There doesn’t appear to be any confusion with trying to describe a different lot. Finally, the seller has lived on the property for 20 years and there are no disputes with the neighbors or anyone else. The bottom line is, we don’t need to correct these typos to close. But, I know you will correct the typos in the new deed to avoid future inquiries. So, yes, Frazzled. Insuring the transaction does not depend on a corrective deed.
First American Title | Florida Legal Eagle | Volume VIII
– Property Professor
Page 9
SHOW ME THE CREDITS!
How to Receive Credit as a Licensed Title Agent through the Coffee with the Underwriter Webinar Series Susan Dutcher, Senior Training Manager Camala Wiles, Senior Project Coordinator
Florida Agency’s Coffee with the Underwriter webinar series has experienced amazing success. A huge draw for attendees is the opportunity to receive continuing education credit. In today’s busy title industry, it’s hard to find extra time to procure that elusive, yet vital, credit. As an approved provider of continuing education with the Department of Financial Services (DFS), First American Title must meet specific requirements before credit can be granted on behalf of their agents.
ATTENDING
• On the day of the webinar, using the link provided in the confirmation email, the registrant should log into GoToWebinar on their computer as an attendee.
o I f a registrant uses a link other than the one assigned to him or her at registration, he or she will not show as attending. For example, if Bill forwards his link to Suzy and Suzy logs into GoToWebinar using Bill’s link, she’ll be able to access the webinar, however it will not show Suzy attended and thus CE credit cannot be requested on her behalf.
o I f the same email address was used by two different registrants, only one registrant will show as attending, even if both logged in and attended the webinar
As outlined in the following statutes, those requirements are as follows:
• 69B-228.030 Definitions 0 A minimum of 50 minutes of classroom instruction • 69B-228.080 Course Approval; Requirements; Guidelines
0 Employ some type of monitoring method to verify students are participating 0 Each student is required to sign an acknowledgement verifying attendance and completion of entire course
• 69B-228.160 Prohibited Practices
0 Education provider is prohibited from issuing certificates of completion to, or report on a roster, students who did not attend or complete the entire continuing education course.
GoToWebinar is the platform used to administer the webinars. By using GoToWebinar First American Title can: • Verify attendance
• Attendees can access the audio portion by either dialing in using a phone or connecting through the computer.
oC alling in and listening via telephone allows an attendee to hear the webinar, however, if he or she does not log into GoToWebinar on his or her computer their attendance will not register on the report. Without that piece, First American Title is unable to request CE credit on the attendee’s behalf • Attendees must be logged into GoToWebinar for a minimum of 50 minutes to fulfill the attendance requirement. • Attendees must certify, via a poll towards the end of the presentation, they attended the webinar.
• Determine length of time a participant was in session • Secure participant’s acknowledgement of attendance and completion Continuing education credit can be hard to come by, so it’s important to know and understand the necessary steps to avoid disqualification.
REGISTERING
• Any person seeking credit must register. • After registering, a confirmation email is generated and forwarded to the email address entered.
o If a confirmation email is not received, it may be an indication an error occurred or that registration did not take place.
o If a registrant does not receive a confirmation email, he or she can try to re-register or email Camala Wiles (cwiles@firstam.com) for assistance. • The email confirmation contains a link specifically assigned to the registrant. This link is based on the email address provided at registration.
First American Title | Florida Legal Eagle | Volume VIII
Once attendance is verified for the correct length of time, the next step is submitting attendees’ information to DFS so CE credit can be issued. First American Title has 20 days to report this information. When registering, agents are asked to provide several pieces of information including their street address, city and Florida title agent license number. The goal is for First American Title to have the license numbers, upon registration, for all agents who want credit. An auto-generated email sent after the webinar ends encourages attendees to provide their license numbers if they were not provided upon registration. Attendees who do not supply the necessary information up front may not get credit for his or her attendance if past the 20-day threshold. Attendees looking for Florida Bar or National Association of Legal Assistants (NALA) credit are responsible for submitting his or her continuing education information individually to the respective agencies.
Page 10
Closing Corner
Federal Tax Payments, Unsecured Debt and Credit Cards Stefanie Lollis, Escrow Branch Manager
Payment of federal taxes, unsecured debt, and credit cards associated with a closing transaction can be painful to track and difficult to ensure proper credit by the recipient. Oftentimes payment of such debts become a requirement of the buyer’s new lender when purchasing a home or a new lender on a refinance. Because payments of this nature can be time consuming, challenging, and a liability, it is ONLY recommended when a new lender requires these payments as a condition of loan approval and instructions are clearly identified in your loan closing instructions. Below are some tips First American Title Insurance Company has found effective in reducing the rejection or return of funds to payoff such debts and increase the chances of proper and prompt crediting of funds by the creditor or the IRS:
Federal Tax Payments
Unsecured Debt and Credit Cards
• Set up a separate check for each tax year being paid • Obtain a 1040 voucher from the taxpayer • Be sure the dollar amount on the voucher and lenders’
• Obtain current account statements showing creditor
• Check should be payable to the correct party and address
• The account number and borrower name should be
• Taxpayer Identification Number (TIN) and taxpayer name
• Do not enter the credit card numbers into your database
• Applicable tax year and 1040 should also be written on
• Be sure the handwritten account number is not visible
• Send via trackable means
• For vehicle payoffs, you should possess an actual payoff
instructions are identical
on page 2 of the voucher
should be handwritten on the face of the check the face of the check. ( e.g., 2018 1040
name, account number and mailing address
• Collect funds to pay the debt from borrower through escrow
handwritten on the face of the check or software
through any envelope window statement
• For vehicle payoffs, direct the lender to send the title or release documentation to the borrower
In the Know The Florida Education, Training, and Special Projects Department is dedicated to supporting First American Title Florida agents through the creation and delivery of specialized training.
Sue Dutcher Director
Dona Sutton
Florida Agency Senior Technical Trainer
Paula Rutter
Veronica Johnson
Florida Agency Technical Trainer
Camala Wiles Senior Project Coordinator
Agency Operations Coordinator First American Title | Florida Legal Eagle | Volume VIII
Page 11
2019 Florida Legislative Update James (Jim) Kearn, Esq., Senior Underwriting Counsel
Session Law 2019-12 - Public Records / Government Personnel and Home Address - Fla. Stat. ch. 119 The home address, telephone numbers,
dates of birth, and other information of certain government personnel (e.g. judges, prosecutors, police, correctional and probation officers, personnel of the Department of Children and Families ) are exempt from disclosure in the public records. This is why title personnel may encounter, when looking up information on the property appraisers’ website, the sketch of lot being sold, but not the owner of such lot, or not be able to obtain tax or other desired information. This new law expands the definition of “home address” to include “the dwelling location at which an individual resides…the physical address, mailing address, street address, parcel identification number, plot identification number, legal property description, neighborhood name and lot number, GPS coordinates, and any other descriptive property information that may reveal the home address”. The redaction of legal descriptions undoubtedly will create additional challenges and make title searches more time consuming. This law became effective on July 1, 2019. There is no uniform plan or method of implementation. Each county will institute their own requirements, such as a notarized request and release, for access to redacted information. http://laws.flrules.org/2019/12
Session Law 2019-42 – Taxation / Documentary Stamps on Deeds Between Spouses - Fla. Stat. §201.02 This law removed the requirement in Fla.
Stat. §201.02 that a deed between spouses had to be recorded within one year of the date of marriage in order to be exempt from the payment of documentary stamps. This law became effective July 1, 2019. http://laws.flrules.org/2019/42
Session Law 2019-67 – Judicial Process / Lis Pendens - Fla. Stat. §48.23 TThis new law makes three significant changes to Fla. Stat. §48.23: • §48.23(1)(b) previously provided that any person acquiring for value “an interest” in the real or personal property during the pendency of an action (other than a party to the proceeding or the successor) took such “interest” free from all claims against the property that were filed in such action by the party who failed to record a notice of lis pendens (or whose notice expired or was withdrawn or discharged), and from any judgment entered. This new law expanded this exemption to include and protect a lien that is acquired by any such person upon property in such litigation where a notice of lis pendens was not filed, or expired, was withdrawn or discharged. • Fla. Stat. §48.23(1)(d) previously provided the lis pendens barred the enforcement of all unrecorded interests and liens, unless the holder thereof intervened within 30 days after the recording of the lis pendens. This new law requires only that the holder of such unrecorded interest or lien “moves to intervene” within 30 days, but it also adds it’s necessary for the court to ultimately grant that motion to intervene. • This law amended Fla. Stat. §48.23(1)(d) to explicitly state a valid, recorded lis pendens shall remain in effect after the final judgment through the recording of the instrument transferring title (certificate of title).
First American Title | Florida Legal Eagle | Volume VIII
The law became effective on June 9, 2019, and applies to actions pending on that date, and thereafter. http://laws.flrules.org/2019/67
Session Law 2019-71 – Electronic Legal Documents / Remote Online Notary (RON) Fla. Stat. ch. 117 This law amends several Florida Statutes to address a number of issues presented by open building permits and uncompleted work. • If work has been “substantially completed” under an expired building permit, the remaining work may be done under that permit to close it, without having to obtain a new permit, pursuant to the building code in effect when the permit was applied for. [Fla. Stat. §553.79(15)(b)]
• Subsequent contractor may complete work not done by the contractor on the initial permit, without liability for defects in the work performed by the original contractor. [Fla. Stat. §553.79(15)(a)(1)] • Local government authority that issued the building permit may send to the owner a notice, no less than 30 days before expiration, that such permit is about to expire. [See Fla. Stat. §125.56(c); Fla. Stat. §553.79(1)(c)] • An arm’s length purchaser is not liable for fines, penalties, assessments or sanctions stemming from a former owner’s building permit that was not closed. [Fla. Stat. §553.79(16)(a)] This law became effective on July 1, 2019. http://laws.flrules.org/2019/75
Session Law 2019-85 – Right of Entry / Fla. Stat. §270.11 Fla. Stat. §270.11 previously provided the right of entry reserved by the Trustees of the Internal Improvement Trust Fund or State Board of Education to any interest in phosphate, minerals, metals, and petroleum, was released as to any parcel of property that is, or was, a contiguous tract of less than 20 acres in the aggregate under the same ownership. This new law expanded that release to rights of entry also held by “a local government, a water management district, or other agency of the state”. This law took effect on July 1, 2019. Note: This law does not require there be a newly recorded deed to the land in question on or after July 1st, 2019; the release is automatic. http://laws.flrules.org/2019/85
Session Law 2019-90 / Business Organizations This is an extensive, 273page law that addresses a multitude of provisions in Fla. Stat. ch. 605 (Revised Limited Liability Company Act); Fla. Stat. ch.607 (Business Corporation Act); Fla. Stat. ch. 617 (Corporations Not For Profit); Fla. Stat. ch.620 (Partnerships); Fla. Stat. ch.621 (Professional Service Corporations And Limited Liability Companies) , to name a few. The revisions in these chapters include requirements and prohibitions for articles of incorporation/organization; removing exemption from liability for pre-incorporation transactions; prohibiting certain provisions in bylaws; adding duties on a registered agent regarding handling and forwarding process, notice or demand; amending provisions regarding the notice and holding meetings to authorize action. These are just a few of the revisions.
Agents involved in forming, representing, or advising any of these organizations are urged to review the provisions regarding the actions the organization may take. http://laws.flrules.org/2019/90
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CASE LAW UPDATES CONDOMINIUM
In connection with the entire sale of a condominium, individual unit owners cannot give the condominium association’s board of directors proxies to sell their individual units, vote in favor of any and all resolutions deemed necessary to consummate a sale of the entire condominium, or for a plan of termination if the sale is not consummated, or to commence and prosecute any legal action necessary to accomplish these matters. All Seasons Condominium Association, Inc. v. Patrician Hotel, LLC, Case Nos. 3D17-132; 3D17-130 (Fla. 3d DCA Apr 24, 2019) https:// www.leagle.com/decision/inflco20190424176
CONTRACTS
Deposit Return Buyer not entitled to summary judgment for the return of buyer’s 10% deposit ($62,000) upon failure to obtain loan to satisfy financing contingency in contract, where (i) lender’s appraiser determined value of subject property to be $135,000 less than the purchase price, so that the loan amount sought by the buyer would not meet the lender’s required loan-to-cost ratio of 80%; and (ii) buyer failed to provide written notice to the seller, as required by the contract, that financing contingency was not met, and contract thereupon provided that failure to give such notice waived the financing contingency. Fla. Inv. Grp. 100, LLC v. LaFont, No. 4D182075 (Fla. 4th DCA Apr. 24, 2019) https://www. leagle.com/decision/inflco20190424256
Oral Modification A contract provision that precludes oral modification is enforceable unless the oral modification had been accepted and acted upon by the parties in such manner as would work a fraud on either party to refuse to enforce it. Perera v. Diolife LLC, Case No. 4D18-892 (Fla. 4th DCA June 12, 2019) https://www.leagle. com/decision/inflco20190612153
ENCROACHMENT
Landscaping A neighbor and a driveway contractor were not liable for damaging a tree on a homeowner’s property when they cut some of the tree’s roots that had encroached onto the neighbor’s property. Reason: “[I]t is well-established that an owner of a healthy tree is not liable to an adjoining property owner for damage caused by encroaching tree branches or roots, but
the adjoining property owner “is privileged to trim back, at [his] own expense, any encroaching tree roots or branches . . . which has grown onto his property.” Balzer v. Ryan, No. 1D18-3182 (Fla. 1st DCA Dec. 31, 2018) https://www.leagle.com/ decision/inflco20181231066
HOMESTEAD
Abandonment Injunction for municipal violations which prevented husband and wife from returning to their homestead did not constitute abandonment to allow the husband to sell and convey the property without his wife’s joinder where the wife had made efforts to remedy the violations with the intent of returning. Yost-Rudge v. A to Z Properties, No. 4D173204 (Fla. 4th DCA Feb. 6, 2019) https://www. leagle.com/decision/inflco20190206159
Equitable Lien Equitable Lien cannot be placed by former wife on former husband’s claimed homestead property absent sworn testimony or evidence of fraud, reprehensible or egregious conduct. de Diego v. Barrios, Case No. 3D17-1990 (Fla. 3d DCA Apr. 24, 2019) https://www.leagle. com/decision/inflco20190424184
FORECLOSURE
Allonge - Note Mortgagee still has standing to foreclose, even though the allonge to the note pre-dated that note itself by one day, so long as it is attached to the note, since: 1) subsequent execution of the note does not invalidate the allonge and 2) the Uniform Commercial Code expressly states an instrument may be antedated or postdated. The Bank of N.Y. Mellon v. Fla. Kalanit 770 LLC, No. 4D18-3295 (Fla. 4th DCA Apr. 24 2019) https://www.leagle.com/decision/ inflco20190424283
Deficiency Judgment Lender’s claim for deficiency judgment could proceed on Guarantors’ “Guaranty Agreement” that were plead, but not on the “Guaranty of Completion” (which was not plead), and whether any deficiency was for the actual, full deficiency, rather than the amount remaining due after bankruptcy was an issue to be determined by Florida contract law and not bankruptcy law. D’Agostino v. CCP Ponce, LLC, No. 3D18-676 (Fla. 3d DCA 2019) https://www.leagle.com/ decision/inflco20190501277
First American Title | Florida Legal Eagle | Volume VIII
Estoppel Letter During Foreclosure – Fla. Stat. §701.04 Since Fla. Stat. §701.04(1)(a) requires a holder of a mortgage to deliver, upon request, a written estoppel letter setting forth not only the unpaid balance of the loans secured by the mortgage but any other charges properly due under or secured by the mortgage”, Mortgagee could be held liable for deliberately inflating the amount of fees claimed therein, and consequential damages suffered therefrom. Here, lender included approximately $100,000 in attorneys fees which it refused to document or substantiate, claiming attorney-client privilege. Laptopplaza, Inc. v. Wells Fargo Bank, NA, Case No. 3D18-131 (Fla. 3d DCA, June 19 2019) https://www.leagle.com/decision/ inflco20190619134
Involuntary Dismissal Involuntary dismissal is improper where lender makes a prima facie showing that the loan is in default, and the amount due, even though such lender has not furnished the entire payment history “from the beginning”, which shows when the borrower initially defaulted, or which accounts for a 3-year gap when the loan was serviced by another entity. Deutsche Bank Trust Company Americas v. JB Investment Realty, LLC, Case No. 4D183240 (Fla. 4th DCA June 5, 2019) https://www. leagle.com/decision/inflco20190605287
Lender as Successor to Borrower’s Settlement Agreement A lender that acquired title to the borrower’s property through foreclosure is a “successor and assign” which acquires the rights and liabilities of its borrower under a pre-foreclosure construction settlement agreement the lender knew about, and release, which were signed by borrower, for itself, its successors and assigns.” MBlock Investors, LLC v. Bovis Lend Lease, Inc., Case No. 3D18-501 (Fla. 3d DCA June 5, 2019) https://www.leagle.com/decision/ inflco20190605218
Notice of Default A new notice of default did not have to be given for one and the same default, as a condition precedent to commencing a second foreclosure action where 1) the first foreclosure action was dismissed without prejudice, and 2i) the initial ‘noticed” default was never cured. HSBC Bank USA, N.A. v. Leone, Case No. 2D17-2851 (Fla. 2d DCA May 3, 2019) https:// www.leagle.com/decision/inflco20190503152
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CASE LAW UPDATES Standing of Loan Servicer to Enforce Provisions of Mortgage The loan servicer, who held the note
hearing, and to introduce exhibits, thereby violating his procedural due process rights
and who was also the loan owner’s agent, was and holder of the Note, provided a sufficient legal basis for the court to enforce the jury trial waiver in the mortgage, even though the loan servicer was not a party to or assignee of that mortgage.
Rokosz v. Haccoun, Case No. 3D18-2459 (Fla. 3d DCA June 5th, 2019). https://www.leagle. com/decision/inflco20190605266
Goodenow v. Nationstar Mortgage LLC, Case No. 3D18-1480 (Fla. 3d DCA June 5, 2019) https://www.leagle.com/decision/ inflco20190605239
Standing of Purchaser to Defend Foreclosure of Mortgage by Predecessor in Title An owner of property subject to a mortgage given by its immediate predecessor in title has standing to defend the foreclosure suit, and to dispute the legal sufficiency of the mortgagee’s proof and the amount claimed, though not a party to the original note and mortgage. Green Emerald Homes, LLC v. 21st Mortg. Corp., No. 2D17-2192 (Fla. 2d DCA June 7, 2019) https://www.leagle.com/decision/ inflco20190607160
Void Judgment The failure to join the only record title owner of the property rendered the final judgment of foreclosure void, and because such judgment was void, the lis pendens had no effect on unrecorded property interests of holders who did not intervene pursuant to Fla. Stat. §48.23. FL Homes 1 LLC v. Kokolis, Case No. 4D182709 (Fla. 4th DCA May 15, 2019) https:// www.leagle.com/decision/inflco20190515181
LIS PENDENS
Court cannot treat the former husband’s motion to discharge the pendens, as a motion for reconsideration of the order granting the former wife’s motion for lis pendens because, in doing so, the trial court deprived the husband of his right to have an evidentiary
MARKETABLE RECORD TITLE ACT (MRTA) Extinguishment of Declaration of Restrictions
Association’s Declaration of Restrictions (Declaration) were extinguished where the Declaration, and the subsequent owner’s root of title, were both more than the 30 years old, and the association filed its Notice to Preserve its Declaration more than 32 years after the initial recording. Lyday v. Myakka Valley Ranches Improvement Ass’n, Inc., No. 2D17-1726 (Fla. 2d DCA Mar. 15, 2019) https://www.leagle.com/decision/ inflco20190315169
REPLEVIN
Summary judgment was improper in favor of ex-boyfriend jeweler to recover over $200,000 in jewelry, art, and fashion accessories from his ex-girlfriend and her dwelling where genuinely disputed issues of material fact remained as to whether such jewelry and art were “gifts” as asserted by ex-girlfriend. Maguire-Ress v. Stettner, No. 4D18-2742 (Fla. 4th DCA Apr. 17, 2019) https://www.leagle. com/decision/inflco20190418290
REVERSE MORTGAGE
Foreclosure was improper where the mortgagee failed to satisfy the condition precedent in the reverse mortgage of having to prove the property being foreclosed was not the principal residence of the surviving coborrower spouse who signed the mortgage. OneWest Bank, FSB v. Palmero, No. 3D143114 (Fla. 3d DCA Apr. 24, 2019) https://www. leagle.com/decision/inflco20190424174
First American Title | Florida Legal Eagle | Volume VIII
TAKING OF PROPERTY WITHOUT JUST COMPENSATION
An owner whose property was taken, without just compensation, may bring a Fifth Amendment claim under claim under 42 U. S. C. §1983, without first suing in state court, as previously required by Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), which is overruled. Knick v. Township of Scott, Case No. 17–647 (U.S June 21, 2019) https://www.leagle.com/ decision/insco20190621f30
TAXATION, AD VALOREM
A county’s immunity from taxation within its own borders does not extend to land it owns in another county, and the 12,400 acres Pinellas County owns in Pasco County is thus subject to taxation in Pasco County Joiner v. Pinellas Cnty., Fla., No. 2D17-1040 (Fla. 2d DCA May 3, 2019) https://www.leagle. com/decision/inflco20190503147
TRESPASS / INJUNCTION - AIR SPACE
A temporary injunction enjoining a neighbor from trespassing onto a landowner’s property during the neighbor’s construction of a zerolot-line 12 story office building on neighbor’s own property does not restrict the use of a tower crane over the landowner’s property where landowner’s motion was devoid of any reference to airspace trespass and use of a tower crane. WD 19790, LLC v. Dan Trust, Nos. 3D17-1706, 3D16-2796 & 3D17-151 (Fla. 3d DCA Jan. 23, 2019) https://www.leagle.com/decision/ inflco20190123185 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.
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Underwriting Spotlight:
Caroline Velazco Senior Underwriting Counsel Q
WHERE DID YOU WORK PRIOR TO COMING TO FIRST AMERICAN TITLE?
A
I worked as an associate in a mid-level general practice law firm on Long Island, New York. It was the same firm I had clerked with during law school. After graduation, I was offered a position with the firm, and was allowed to choose between the litigation and real estate departments. Real estate won out as I was particularly drawn to that practice area. I primarily handled mortgage foreclosures, and closings for lenders, purchasers, sellers, and small developers.
Q
WHAT MADE YOU WANT TO WORK IN THE TITLE INDUSTRY?
A
I always enjoyed working with title professionals when I practiced in New York, and was interested in the background of transactions. Combining that with my love with of real estate seemed like a logical progression.
Q A
WHAT BROUGHT YOU TO FIRST AMERICAN? My title insurer of choice in New York was First American Title. When I moved to Florida, I continued to travel monthly to New York to handle real estate closings for two of my developer clients. I eventually decided to grow roots in Florida, and after working at two other real estate-
related companies, I sent out an unsolicited resume to First American Title and was called in for two interviews. At the time, the only position available was a sales associate position, which I took. I managed one of our closing offices, worked in the International Division, and also in the Claims Department. During my 18th year with First American, I again shifted gears and joined the Florida Underwriting Department and could not be happier to be working with such a dedicated and talented team.
Q
TELL US ABOUT THE EMPLOYEE CULTURE IN YOUR OFFICE.
A
The culture at the Sunrise office is one of comradery, fun, mutual respect, support, and hard work. We have many experienced people working in Sunrise, and they are always willing to share their talents and expertise. All are dedicated to providing superior customer service to both our agents and internal customers.
Q
TELL US SOMETHING THAT NOT MANY PEOPLE KNOW ABOUT YOU.
A
I am an avid reader and collector of Stephen King novels, and have a small collection of Funko Pops! related to his books. Maybe this hobby is somehow related to my undergraduate degree in psychology?!
Upcoming Holidays Our offices will be closed on the following dates:
Thursday, November 28-29, 2019
THANKSGIVING HOLIDAY Wednesday, December 25, 2019
CHRISTMAS DAY
First American Title | Florida Legal Eagle | Volume VIII
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FIRST AMERICAN TITLE
FLORIDA STATE COUNSEL
UNDERWRITING TEAM REGIONAL AND STATE UNDERWRITING COUNSEL TEAM Alan McCall VP, Regional Underwriting Counsel, FL, PR, USVI D: 407.618.7935 M: 407.312.9132 amccall@firstam.com
Len Prescott VP, Florida State and Regional Counsel, FL, PR, USVI D: 305.908.6252 M: 305.900.8427 lprescott@firstam.com
John Balberchak Sr. Underwriter FL, USVI D: 850.296.3084 M: 850.445.9323 jbalberchak@firstam.com
Greg Blomeley VP, Underwriter D: 407.691.5210 M: 850.445.9320 gblomeley@firstam.com
Jennifer Bloodworth Sr. Underwriting Counsel D: 407.691.5296 M: 407.790.2057 jbloodworth@firstam.com
Bill Boyce Sr. Underwriting Counsel D: 727.549.3312 M: 727.501.3454 wboyce@firstam.com
Caroline Velazco Sr. Underwriting Counsel FL, PR, USVI D: 954.839.2942 M: 954.821.2562 cvelazco@firstam.com
Ed Hamann Sr. Underwriting Counsel FL, PR, USVI D: 407.691.5223 M: 321.331.5469 ehamann@firstam.com
James (Jim) Kearn Sr. Underwriting Counsel D: 407.691.5277 M: 407.840.9226 jkearn@firstam.com
Chip Koval Underwriting Counsel D: 352.415.4765 M: 352.240.2519 ckoval@firstam.com
Pat Newton Sr. Underwriting Counsel D: 239.330.3328 M: 239.272.1856 pnewton@firstam.com
David Roberts Sr. Underwriter D: 813.261.5580 M: 727.430.5382 daroberts@firstam.com
Joe Teichert Underwriting Counsel D: 904.858.9206 M: 904.832.0615 jteichert@firstam.com
W. Wade Wallace Underwriting Counsel D: 239.676.3747 M: 239.961.2110 wawallace@firstam.com
Sherri Wedesky Underwriter D: 850.296.3170 M: 850.766.7792 swedesky@firstam.com
Underwriting Contact Information: 866.728.5207 | FloridaUW@firstam.com
First American Title | Florida Legal Eagle | Volume VIII
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