December 2009
Dear Real Estate Professional:
Federal: Mortgage Holder Stripped of Foreclosure Rights by Defective Paperwork. A federal judge in Mortgage Electronic Registration Systems (MERS) v. Warren E. Agin, Trustee upheld a bankruptcy court ruling that allowed a trustee to treat a mortgage as an unsecured claim. If a mortgage is treated as an unsecured claim, defective mortgage paperwork can result in the loss of the mortgage holder's foreclosure rights. The case exemplifies the consequences resulting from the inattentive execution of mortgage documents. Click here for decision link.
DC: OTR Adopts Tax Sale Threshold The OTR has amended Chapter 3 (Real Property Taxes) of Title 9 (Taxation and Assessments) of the District of Columbia Municipal Regulations by adding a section 317, Tax Sale Threshold. Under the new section, only real properties where the amount of taxes that are delinquent are $1,200 or more will be sold at tax sales. The OTR states that the threshold was instituted to maximize the efficiency of tax sales. Click here to view the notice of final rulemaking in District of Columbia's Register. The tax sale began on November 30 and is now completed.
DC: Proposed Bill to Change TOPA Mailing Rules Bill 18-179, the "Tenant Opportunity To Purchase Preservation Clarification Act of 2009" proposes to eliminate the requirement that DHCD receive copies of notices of tenant elections. Instead, the Bill would allow exercise of tenant rights, simply by utilizing regular mail, regardless of whether the notification is received. The DCLTA opposed this Bill, indicating that its passage would make it almost impossible to insure any tenanted properties. Click here for Bill and Testimony.
DC: TOPA Updates Instructions for Offers of Sale with a Third
Party Sale Contract The Rental Conversion and Sale Division of
the DHCD has updated and made available on its website, three forms
providing instructions for preparing and issuing an offer of sale
with third party sale contracts.
Single Unit: To view
instructions for preparing an offer of sale with a third party sale
contract for a single rented family house, single rented condominium
unit or single rented cooperative unit please click here.
2-4 Unit: To view instructions for preparing and issuing an
offer of sale with a third party sale contract for two (2), three
(3), or four (4) rental unit housing accommodations please click here.
5 or More Unit: To view instructions for preparing and
issuing an offer of sale with a third party sale contract for five
(5) or more rental unit housing accommodations please click here.
MD: Unusual Decision by Maryland OAH holding that Lienor shall be paid by Settlement Company, rather than by Lienee An Administrative Law Judge has held that a settlement company violated Maryland's Insurance Article by failing to pay a lien from settlement proceeds and that the settlement company's bond be debited for the full amount of the lien. The case involved a party who had a judgment lien against a commercial entity somehow related to the individual seller of realty. When the individual went to sell her property, the title company concluded that the lien did not attach to the real property and did not pay the lien. The ALJ concluded that the lienor had standing to claim a violation by the title company of the Insurance Article by failing to satisfy the lien. Obviously an unusual, albeit dangerous, precedent for Maryland. Click here for decision.
Federal: Legislation proposed to Require Production of HUD-1 and delivery to Borrower 3 days before closing An amendment to RESPA called "The Borrowers' Right to Inspect Closing Documents Act of 2009" proposes that Lenders produce to the title company, not later 4 days before closing, the Note, Deed of Trust, TIL, and final closing instructions. The title company must deliver those documents, plus the HUD-1 to the borrower not later than 3 days before closing. The proposal allows "corrections" to be made i) if a title run-down reveals previously undisclosed matters, ii) borrower's inspection of property requires changes to the HUD-1, iii) borrower and lender agree to make substantial changes to the loan, and iv) any other corrections that HUD permits by regulations. The Bill may need some fine-tuning to account for per-diem charges, recalculation of recording fees, messenger fees, etc., changes reported by condominium associations, changes in allocation of fuel-in-tank, changes in credits/debits relating to existing changes in matters that may not affect the Buyer (i.e. changes in commissions, changes in payoffs from seller's proceeds). A good contact person for comments would be Justin Ailes, Director of Government Affairs, American Land Title Association at jailes@alta.org.
Federal: News: Money Store CEO Sentenced to 11 years. Jennifer McCall of Ft. Washington, MD was sentenced to 11 years in connection with a local mortgage fraud that falsely offered to assist homeowners facing foreclosure. Restitution was ordered by U.S. District Court Judge Titus in the amount of over $16Million. Co-conspirators were also sentenced (Joy Jackson was sentenced to roughly 12 years). The scheme often entailed homeowners with significant equity who were encouraged to transfer title to straw buyers. The properties were then refinanced, often based upon inflated appraisals, but, instead of the money going to pay off the borrowers' debts, the funds were diverted.
DC: Zoning Information Web tool launched The DC Office of Zoning has launched an interactive map that provides residents, developers, and land-use lawyers with up to date zoning information about properties throughout the city. To view the map, please click here.
DC: Jackson & Campbell, P.C. makes available a CHART OF PENDING D.C. LEGISLATION.
OTHER LEGAL UPDATES:
Jackson & Campbell, P.C.'s Trust
& Estates Legal Update
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Sincerely,
Roy L. Kaufmann of the Real Property and Asset Management Group
Jackson & Campbell P.C.
email: Roy
L. Kaufmann at rkaufmann@jackscamp.com
voice: (202)
457-1600
web: www.JacksCamp.com
The editor acknowledges with thanks the research and preparation for this newsletter by Nicholas C. Lipresti, an intern with the Firm.
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