The Eagle's Nest - November/December 2015

2015

NOVEMBER DECEMBER

THE EAGLE’S NEST A WISCONSIN AGENCY NEWSLETTER

CONDOMINIUM MONEY JUDGMENTS

PAGE IN THIS ISSUE

1

Condominium Money Judgments

2

News Brief

3

Upcoming Holidays and Seminars

4

Medicaid Liens and Living Trusts

5

Zombie Foreclosures: The Walking Debt

By: Donald L. Schenker, Area Underwriting Counsel

Wisconsin Statute Section 703.25(3) provides that a judgment for money against an association shall be a lien against any property owned by the association, and against each of the condominium units in proportion to the liability of each unit owner for common expenses as established under the declaration in an amount not exceeding the market value of the unit, but not against any other property of any unit owner.

Office Contact Information:

As a practical matter, if the money judgment is of a size that can be easily handled by the association, it would be easy

3330 University Avenue, 3rd Floor Madison, WI 53705 P: 608.236.1300 | F: 608.236.1320

for First American Title to insure over it for a lender. The association has the power to make assessments and pay the judgment before the lien would be enforced.

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. ©2015 First American Financial Corporation and/or its affiliates. All rights reserved.  NYSE: FAF

BRIEF RESIDENTIAL SECTOR IS THE MORTGAGE INDUSTRY ENTERING A NEW ERA OF PARTNERSHIP?

The mortgage transaction involves many moving parts. A typical residential purchase home loan can be touched by five, 10 or even more separate service providers before the loan closes and the deed is recorded.

By: Michael Bell and Elliot Liss, Closeline Settlements, contributors HousingWire, October 21, 2015 To read the article in full, visit: http://www.housingwire.com/articles/35421-is-themortgage-industry-entering-a-new-era-of-partnership

HACKERS’ LATEST SCAM: TRICKING HOME BUYERS INTO WIRING THEM SETTLEMENT FUNDS I hate to be the bearer of bad news — but there is yet other scheme con artists are using to swindle you out of money.

By: Jill Chodorov, The Washington Post, October 10, 2015 To read the article in full, visit: http://www.washingtonpost.com/blogs/where-welive/wp/2015/10/12/hackers-latest-scam-tricking-home-buyers-into-wiring-themsettlement-funds/

NEED A HOME MORTGAGE? FANNIE SAYS FORGET THE PAY STUBS

Collecting pay stubs for a home-mortgage application has been a time-honored tradition, barring a few ill-fated years running up to the financial crisis.

COMMERCIAL SECTOR MBA PROJECTS 6% INCREASE IN 2016 COMMERCIAL/ MULTIFAMILY MORTGAGE ORIGINATIONS Mortgage bankers’ originations of multifamily mortgages are forecast at $187 billion in 2016, while total multifamily mortgage originations project to $225 billion.

By: Ali Ahmad, MBA Newslink®, October 29, 2015 To read the article in full, visit: https://www.mba.org/mba-newslinks/2015/ october/mba-newslink-thursday-10-29-15/mba-projects-6-increasein-2016-commercial/multifamily-mortgage-originations

FUNDAMENTALS REMAIN STRONG FOR U.S. REAL ESTATE Despite a jumpy stock market and shaky global conditions, the U.S. economy appears to be on solid ground for the near future, according to the latest ULI Real Estate Consensus Forecast.

During panel discussion at the ULI Fall Meeting, three of the real estate industry’s leading economic experts explained their reasons for optimism while adding notes of caution.

By: Kevin Brass, Urban Land Institute, October 19, 2015 To read the article in full, visit: http://urbanland.uli.org/capitalmarkets/fundamentals-remain-strong-u-s-real-estate/

THE RELATIONSHIP BETWEEN THE SMALL BUSINESS ADMINISTRATION AND COMMERCIAL REAL ESTATE

This infographic contains information from NAR’s survey of REALTORS®’ use of Small Business Administration loans, education, and training.

By: Joe Light, The Wall Street Journal, October 20, 2015 To read the article in full, visit: http://www.wsj.com/articles/need-a-homemortgage-fannie-says-forget-the-pay-stubs-1445333580?mod=residential_real_ estate

By: National Association of REALTORS®, October 13, 2015 To read the article in full, visit: http://www.realtor.org/infographics/the-relationshipbetween-the-small-business-administration-and-commercial-real-estate

DO YOU SAFELY, SECURELY SEND EMAILS WITH THE NEW TRID RULE?

TAKE IT ONE MONTH AT A TIME: LIQUIDSPACE LAUNCHES MONTHLY RENTALS, NEW LEGAL FRAMEWORK

By: Bud Walder, HousingWire, October 8, 2015 To read the article in full, visit: http://www.housingwire.com/blogs/1-rewired/ post/35302-do-you-safely-securely-send-emails-with-the-new-trid-rule

By: PR Newswire, October 14, 2015 To read the article in full, visit: http://www.prnewswire.com/ news-releases/take-it-one-month-at-a-time-liquidspace-launchesmonthly-rentals-new-legal-framework-300159352.html

3 TRENDS SET TO IMPACT REAL ESTATE

COMMERCIAL REAL ESTATE’S DATA DILEMMA

About two years ago, the American Land Title Association (ALTA) published a set of best practices for real estate transaction professionals which included a heavy focus on data and information security.

The real estate business is going to be shaken up by a changing mindset on how consumers want to live, work, and even drive.

By: Real Estate News, REALTOR® Mag, October 20, 2015 To read the article in full, visit: http://realtormag.realtor.org/dailynews/2015/10/20/3-trends-set-impact-real-estate

First American Title | The Eagle’s Nest | November/December 2015

Forget everything you know about commercial real estate. LiquidSpace, the premier network for office space, today announces its launch of monthly rentals.

“There are three kinds of lies: lies, damned lies and statistics.” Taken from Mark Twain’s 1906 serial Chapters from My Autobiography, that favorite quote of mine is just as applicable if you fast-forward more than a century and look at commercial real estate today.

By: Timothy King, CPEX Real Estate, LinkedIn, October 13, 2015 To read the article in full, visit: https://www.linkedin.com/pulse/ commercial-real-estates-data-dilemma-timothy-king

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FROM OUR HOME

to yours

H A PP Y

HOL I DAY S! UPCOMING

HOLIDAYS

OUR OFFICES WILL BE CLOSED ON THE FOLLOWING DATES:

THURSDAY

UPCOMING TELESEMINARS

Seminars will be presented from 9:00am – 10:00am (CST) DEPARTMENT OF NATURAL RESOURCES MATTERS: WETLANDS, WATER, FLOWAGE AND MINERAL RIGHTS Wednesday, November 18th Presented by: James E. Powers, Senior Underwriting Counsel

FRIDAY

NOVEMBER 26TH – NOVEMBER 27 TH

30/60-YEAR TITLE AND RECORDS SEARCH | STATUTE OF LIMITATIONS Wednesday, December 2nd Presented by: Donald L. Schenker, Area Underwriting Counsel

FRIDAY, DECEMBER 25 TH

FINAL TITLE POLICIES Wednesday, December 16th Presented by: James E. Powers, Senior Underwriting Counsel

THANKSGIVING HOLIDAY

CHRISTMAS DAY

NOTE: Seminar specific call-in numbers and passcodes will be sent out with registration reminders and materials for each seminar.

FRIDAY, JANUARY 1ST

NEW YEAR’S DAY

First American Title | The Eagle’s Nest | November/December 2015

Please contact Joanne Zech at jzech@firstam.com if you have any teleseminar-related questions.

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Medicaid Liens and Living Trusts By: James E. Powers, Senior Underwriting Counsel

Does the State of Wisconsin have the right to file a

A lien against an individual will normally not attach

claim or lien against any real estate owned by the

to property owned by a trust. But in Wisconsin,

recipient of Medicaid? Consider this scenario: Max

an exception to this rule was created to allow

Owner purchased his home in August of 2005. In

Medicaid liens to attach property owned by a

July of 2011, he conveyed the property into the

revocable trust created by recipient; even if the

Max Owner Revocable Living Trust of July 18, 2011.

property was conveyed into the trust years before

Max was admitted to a long-term nursing facility

the lien. Medicaid liens are filed with the Register of

in February of 2012. Two years later, the Wisconsin

Deeds in the county where the recipient’s property

Department of Health Services (DHS) filed a

is located. They should be listed as exceptions,

Medicaid lien against Max’s property. Max passed

even if the property is owned by the recipient’s

away in May of 2015, and his nephew, the successor

revocable trust.

trustee, is now preparing to sell the property.

Does the Medicaid lien still attach to the property?

Surprisingly, yes.

First American Title | The Eagle’s Nest | November/December 2015

Page 4

e i b Zom sures o l c e r Fo Walking Debt The

By: Steve Zablocki, Underwriting Counsel

The term zombie foreclosure or zombie title appears to have first come into use in 2013. 1 It refers to a situation where the rights to ownership and possession remain with the homeowner who believes he or she has lost the property as a result of foreclosure. Rather, the lender may have chosen to walk away, charging off the debt rather than taking title to the property.

Further, no more than 10 days after confirmation, the purchaser must pay to the clerk of courts the transfer tax fee and the cost of recording the deed and any certificate or waiver. 5 The judgment creditor must provide to the court the receipt for submitting the transfer tax and any certificate or stipulation. 6 Finally, upon confirmation of sale and after compliance by the purchaser of the terms of sale (including paying the purchase price), the clerk of court shall transmit the deed, the transfer return, any certificate, waiver or stipulation and the amount due to record the deed to the register of deeds for recording. 7 No exception is made for the judgment creditor to the recording requirement.

Consequently, even in cases where the property is purchased by the lender, the deed will still be forwarded to the register of deeds for recording within 10 days of confirmation.

Additionally, a zombie foreclosure can also occur if the lender or other purchaser never records the deed following the sale. In these cases, the former owner is left on the tax roll and remains liable for all costs of ownership. The taxing authority may eventually take the property by tax deed, but the property is left abandoned and vacant for years and becomes blight on the neighborhood.

The City of Milwaukee has been hit particularly hard by zombie foreclosures. 2 As a result, on August 12, 2015, the Wisconsin legislature enacted Wisconsin Statute §846.167; Confirmation of sale and transmittal of deed in populous counties. The new legislation is only applicable to Milwaukee County and is effective January 1, 2016. 3 In instances where the purchaser is not the judgment creditor, the new law requires the purchaser, prior to confirmation, to provide the judgment creditor any information required to complete the transfer tax return and any information required for a certificate or waiver of the rental unit energy efficiency statute. 4

First American Title | The Eagle’s Nest | November/December 2015

See “Special Report: The latest foreclosure horror: the zombie title” http://www.reuters.com/article/2013/01/10/us-

1

usa-foreclosures-zombies-idUSBRE9090G920130110?&

See “Hundreds of zombie homes plague Milwaukee neighborhoods” http://www.jsonline.com/news/

2

milwaukee/hundreds-of-zombie-homes-plague-milwaukeeneighborhoods-b99276701z1-260613161.html 3

Wis. Stat. §846.167(1)

4

§846.167(2)(a)

5

§846.167(2)(b)

6

§846.167(2)(c)

7

§846.167(3)

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