Florida Land Title Association Gov't Affairs Blog

Insurance Restructuring Bill. HB 725/SB 938

me@stanandrew.com — Tue, 14 Feb 2012 22:14:47 GMT

2/21/12 Update Today SB 938 was approved by the Senate Budget committee without the title industry's amendments. We'll continue to work on protecting the existing surety bond, and make other changes but things are not looking promising on this bill.

Senator Richter and Rep. Hagar have filed a bill at the request of DFS that the industry has been tracking since early in the session. Along with changes, the bill would

a. Eliminate the current $35,000 surety bond requirement

b. Provide that only licensed agents could solicit for the sale of insurance

c. Require continuing education to be taken in a 7 hour course (which could be broken up over multiple days) from a single provider.

We have been working with DFS in an attempt to address concerns with these provisions and believe we have reached agreement on language to preserve the current $35,000 bond -- which is important to the protecting the public, and softening the prohibition on unlicensed persons communicating with Realtors and other referral sources. We are still working on a solution to the 7 hour block CE requirement.

In the meantime, these bills have been progressing. both bills have one remaining committee stop.

DFS MyProfile will be down 2-22 4:30 PM through 2-24

me@stanandrew.com — Wed, 22 Feb 2012 02:59:24 GMT

The Florida Department of Financial Services, Division of Agent and Agency Services, advises that its online licensing system, MyProfile, will be unavailable starting Wednesday, February 22, 2012 at 4:30 p.m. EST in order to make necessary enhancements. The system will not become available again until the evening of Friday, February 24, 2012.

HB 213 Mortgage foreclosure

me@stanandrew.com — Fri, 27 Jan 2012 16:27:04 GMT

2/20/12 Update: In spite of opposition, the Senate Companion to the Foreclosure bill, SB 1890, by Senator Latvala passed was approved 5-2 by the Judiciary Committee. The approval included a strike all amendment which includes the title industry's Mini-MRTA provisions. You can review a copy of the Strike All here.

2/8/12.8:45 am Update : This morning discussion was running long and the House Economic Affairs committee "Temporarily Passed" HB 213. this is a procedural move that keeps the bill alive, and but will require a later hearing and approval of the committee. This late in the process, this is not a positive thing. 1/27/12 FLTA members spent many months working with Florida Rep. Kathleen Passidomo (R-Naples) -- herself a Board Certified Real Estate Attorney -- on legislation to address some of the foreclosure problems facing Florida. Her bill included a clear duty on the part of the lender to provide unconditional estoppels within 15 days, to actually return the original note, and to provide a degree of protection to the innocent purchaser of foreclosed property.

We regret to report that the Civil Justice Subcommittee removed each of those important provisions from the bill. While the handling of estoppels and return of the original note, when paid in full, don't actually affect the foreclosure process, they apparently misunderstood that the ultimate goal of a foreclosure is to get the foreclosed property back into the stream of commerce. The finality of foreclosure judgments is a critical part of that process. FLTA will be working with the RPPTL section of the Florida Bar and others in an attempt to bring the finality provisions back into any final bill.

While we focus on a narrow aspect of the bill, we applaud Rep. Passidomo and the Civil Justice Subcommittee for taking on a very complex task and taking very good steps to fixing some of the key problems in Florida's foreclosure crisis.

Updated Bill Tracking Report Posted

me@stanandrew.com — Fri, 17 Feb 2012 22:12:17 GMT

We have posted the updated FLTA Bill Tracking Report. FLTA members can access it here

Title Data Call Bill Passes House

me@stanandrew.com — Fri, 27 Jan 2012 16:41:13 GMT

2/16/12 Update: Congratulations to Rep. George Moraitis! Today the Florida House of Representatives unanimously passed the title industry Data Call bill, HB 643. The linked public records exemption has not yet been heard by the full house but has passed all committees. The Senate companions SB 1404 & SB 1406 have one remaining committee stop.

2/15/12 Update: HB 643 has been approved by all committees, placed on the special order calendar and had its second reading today and is on the agenda for a floor vote tomorrow. The companion public records exemption is is also on the special order calendar and has been read twice.

2/9/12 Update: SB 1404 was reported favorably by the Senate Judiciary Committee this afternoon after amendments conforming it to the house version were made. Next and final committee stop is the Senate Budget Committee.

2/8/12 Update: This morning both HB 643 and 645 were reported favorably by the House Economic Affairs committee with two negative votes. This was the final committee stop for the public records exemption of HB 645, which will now move to the house floor.

Yesterday the Senate government operations committee approved the Senate public records exemption SB1406.

2/3/12 Update: This morning, HB 643 was recommended favorably by the Rulemaking and Regulation Subcommittee. It has one remaining committee stop before the House economic affairs committee.

2/2/12 Update: SB 1406 (the public records companion bill is scheduled to be heard by the Governmental Oversight and Accountability Committee on 2/7/12 at 4:00 PM

One of FLTA's major legislative initiatives for 2012 has been to "fix" the statutes to permit a proper data call. Anytime a government agency is tasked with promulgating (as they do in Florida) or ruling upon the reasonableness of an insurance rate, they need information to do that. It's fairly easy in most lines of insurance, where they can get all necessary information from the insurer.

In title insurance, as we all know, the title agency does a large share of the work in searching title, examining the search, determining insurability and appropriate requirements, in clearing title objections and defects and issuing the final policy. So if you are going to have an appropriate premium rate, they need to understand the substantial costs the agencies incur in doing all of that work. On the other side of the equation, we've been working closely with OIR and DFS to develop the questionnaire that will provide enough information to do that. There is a good article on that process in our June 2011 Newsletter.

In this post, I'm happy to report that this week we were successfully in moving both the House Bill and its related public records exemption (HB 643/HB645 sponsored by Rep. George Moraitis (R-Ft. Lauderdale -- and himself a very good real estate attorney) and its Senate companions (SB 1404/1406 by Sen. Thad Altman R-Melbourne) through one more committee stop.

We still have a ways to go, but remain cautiously optimistic about these bills.

Payoff Statements for Subsequent Owners

me@stanandrew.com — Fri, 17 Feb 2012 01:41:39 GMT

The RPPTL Section initiative to require lenders to provide mortgage payoff information to subsequent owners of encumbered property, notwithstanding privacy considerations, HB 505, has unanimously passed out of its final committee of reference in the house today. This same bill includes changes to the uniform principal and income act.

The Senate companion, SB 1050 was approved by the judiciary committee today, and moved immediately onto the Senate special order calendar.

Construction Lien Fix Passes in House

me@stanandrew.com — Fri, 17 Feb 2012 01:31:24 GMT

Today the House Judiciary Committee unanimously approved HB 897 by FLTA Member Rep. George Moraitis. Among other things this bill fixes a glitch in last year's bill addressing the landlord's liability for tenant improvements and a last minute amendment made last session which implied that a Notice of Commencement continued in effect until the work was completed and final payment made, regardless of the date specified. This was its last committee of reference in the House and the bill will proceed to the full House of Representatives.

The Senate companion, SB 1202, has one more committee stop.

FLTA Files Amicus Brief in Pino v. Bank of New York Case

me@stanandrew.com — Tue, 07 Feb 2012 18:09:55 GMT

Thanks to the generous support of a number of our underwriters, we were able to engage Ken Bell, former supreme court justice, and a great dirt lawyer in his own right to file a "Friend of the Court" brief with the Florida Supreme Court in Pino v. Bank of New York.

More detail and a copy of the brief can be found here.

Estoppels for Subsequent Owners

me@stanandrew.com — Wed, 01 Feb 2012 03:13:56 GMT

Update 2/2/12

SB 1050 is on the agenda for the Senate Banking and Insurance Committee for 2/7/12 at 1:30. After this, it will have one additional committee stop in Senate Judiciary.

1/31/12 -- One of the issues periodically faced by title agents is how to get a mortgage estoppel information when the mortgagor is no longer in title. They've passed, a subordinate lien was foreclosed, or the property was sold "subject to" without a formal assumption. Many lenders took the position that they were not permitted to provide any information because it would be a violation of their privacy obligations to the original mortgagor.

HB 505/SB 1050 attempts to address this issue by requiring lenders to provide a payoff amount and per diem estoppel (but no other detail) when presented with a request from or on behalf of the current owner of the property. The request must include a copy of the instrument vesting title in the new owner.

Today, HB 505 unanimously passed its second committee of reference, and has one more committee stop with the Economic Affairs Committee (Chaired by FLTA 2011 Legislator of the Year Dorothy Hukill).

Fraudulent Document Bill Advances

me@stanandrew.com — Wed, 01 Feb 2012 03:30:22 GMT

SB 996/HB 1331 (By Real Estate Attorney, John Wood) attempts to deal with some of the practices of so-called sovereign citizens, and with elements of the robo-signing problem, by expressly criminalizing the filing, with intent to defraud, of a document relating to real or personal property containing material false information.

HB 1331 was reported favorably by the House Criminal Justice subcommittee today.

Last week, the Senate version was unanimously approved by the Judiciary Committee and is now headed for hearing in the Senate criminal justice committee.

Mechanics Liens for Tenant Improvements

me@stanandrew.com — Wed, 01 Feb 2012 03:22:51 GMT

Last year, we thought we had fixed the problems created by the Everglades Electric case, holding that the landlord's interest was not exempt from liens for tenant improvements unless each and every lease contained exactly the same language claiming the statutory exemption and that language exactly matched the notice filed.

During the sausage making process, some critical language was dropped and it didn't solve the entire problem.

HB 897 (by Real Estate attorney Rep. Moraitis) fixes the critical language. Today, this bill was unanimously approved by the Government Operations Subcommittee, leaving it with one more stop before the House Judiciary Committee. The Senate companion SB 1202 was also scheduled to be heard today, but the Judiciary Committee meeting was cancelled.

HB 149 Website Publication of Foreclosure Sales and Notices Dies

me@stanandrew.com — Wed, 01 Feb 2012 03:03:15 GMT

FLTA had some concerns about HB 149/SB 230 because it seemed to change the longtime standard for making a diligent effort to serve someone before resorting to giving notice by publication; set standards that only one vendor could meet; and would have unfairly shifted the costs of running the website to those seeking to confirm the validity of the publication (something that is currently free in the court records).

We are pleased to report that the House Civil Justice Subcommittee shared our concerns and voted down the bill today. As a practical matter, this bill can be considered dead for this year.

SB 670 -- Hidden Liens passed out of Senate Community Affairs Committee

me@stanandrew.com — Mon, 30 Jan 2012 19:38:35 GMT

SB 670, the hidden liens bill which would require all governmental liens other than ad valorem taxes, special assessments and for utility services to be recorded in the official records before they were binding against a purchaser or lienholder for value, was passed unanimously out of the Senate Community Affairs committee this morning. It has one remaining committee stop in the Senate.

It's companion, HB 671 also has one remaining committee stop and an amendment conforming the two versions has been filed.

Bill to Would Require EPR Searches, Consequential Damages, 90 days claims resolution

me@stanandrew.com — Fri, 27 Jan 2012 17:07:01 GMT

Now for the bad news. Sen. Mike Bennett (R-Bradenton) has filed SB 826, which among other things would require:

1. The insurer to pay policy limits if a claim is not fully resolved within 90 days -- or to pay architects, engineers, lawyers fees, mortgage interest and other listed damages.

2. Would require an Earliest Public Records Search (later amended to a MRTA search) in every case;

3. Payment of policy limits on a failure of title without regard to the value of the insured property; and

4. As amended, would require the issuance of an owners policy at simo rates with every refinance or construction loan.

As one would expect, the title industry -- agents and insurers alike -- have significant concerns about these requirements. The search requirements and inclusion of consequential damages will only increase the costs to the consumer. Yesterday, a committee substitute for this bill (incorporating the changes referenced above) passed out of the Senate Banking and Insurance Committee. Copy here

To his credit, Sen. Bennett has expressed a willingness to work with the title industry (and has already amended his bill in response to some of the industry's concerns). Those discussions will continue in the weeks ahead.

Transferee Tax Liability Bill nears Senate Floor.

me@stanandrew.com — Fri, 27 Jan 2012 16:56:06 GMT

Last year, through the hard work of Rep. John Wood (R- Winter Haven), we came close to solving a significant unintended problem with the transferee tax liability law. That law makes the purchaser of a business responsible for unpaid sales and other taxes owed by the seller. Unfortunately, it can be triggered by the sale of real estate (even a home, under some circumstances) where one is not buying the "business" which triggered the tax.

While the tax liability of the buyer would not be covered under a title policy, our customers often claim the closing agent is responsible for protecting them from all unexpected liabilities. And this is one which can't be detected through a review of the official records -- or anything short of demanding a tax audit of your seller. (obviously not a popular requirement).

The bill, which FLTA strongly supported would have clarified that the sale of 1-4 family residential property, of owner occupied commercial property or vacant land would not trigger transferee tax liability. It passed through the entire committee process last year, passed in the Florida House and died the last night in the Florida Senate.

So, we had to start all over this year. With the strong leadership of the Business and Tax Law Sections of the Florida Bar, this year's bills have passed all committees in the house and all but one committee in the Senate. We are optimistic that this good bill will pass into law this session.

Large Banks Near Robo-Signing Settlement

me@stanandrew.com — Fri, 27 Jan 2012 16:18:44 GMT

The Large Banks are again nearing a settlement over the allegations of robo-signing and fraudulent assignments. More from the Palm Beach Post.

Within the title industry, we rely on the accuracy and validity of the documents which wind up recorded in the court files and the official records. While it is one thing to reach an economic settlement that may preclude future criminal charges, those of us who rely on those official records encourage the collective Attorneys' General to complete their investigation into the scope and nature of the problem and release that information publicly so that we can consider appropriate underwriting standards.

1 in 4 third-quarter home sales were foreclosures in Palm Beach County

me@stanandrew.com — Fri, 27 Jan 2012 16:14:00 GMT

The Palm Beach Post reports that 1 in 4 of the third-quarter home sales in Palm Beach County were post foreclosure properties. More here. This highlights the importance to the title industry and to Florida's still fragile real estate economy of making sure final judgments of foreclosure remain "Final" and are not later called into question by allegations of underlying fraud and robo-signing.

These are the reasons that FLTA has been leading the fight for Rep. Kathleen Passidomo's (R-Naples) HB 213, which would statutorily protect the innocent purchaser of a previously foreclosed home, and are filing an amicus brief on the subject before the Florida Supreme Court.

FLTA Tracking Reports are Posted and will be kept updated

me@stanandrew.com — Sun, 22 Jan 2012 03:54:10 GMT

I'm now posting the Tracking Charts showing the status in the process of all of the bills that I'm actively tracking on behalf of FLTA on our Government Affairs Page. I'll endeavor to update these every weekend through the rest of the legislative session.

If you come across any bills that concern you for the title industry, which I'm not tracking, please let me know.

FHA extends Waiver of Anti-Flipping Rule

me@stanandrew.com — Wed, 28 Dec 2011 01:44:24 GMT

2 years ago, the FHA waived the requirement that all property flips be seasoned more than 90 days in order to be eligible for FHA financing. The waiver was scheduled to expire December 31, 2011, but has been extended until the end of 2012.

Note that the Waiver continues to be limited to sales meeting the following conditions:

All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the Waiver will only apply if the lender meets specific conditions and documents the justification for the increase in value.
The Waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

For more information, see the FLTA bulletin

Southern Title Insurance Corp. Placed into Receivership

me@stanandrew.com — Mon, 26 Dec 2011 18:59:58 GMT

Three months after suspending the issuance of new policies due to financial difficulties, Southern Title Insurance Corp. was placed into receivership Dec. 20 by the Circuit Court of the City of Richmond. A moratorium has been placed on the payment of claims until the receiver completes an evaluation of Southern Title’s financial condition.

Please note this Southern Title is a Richmond based insurer and in no way associated with the Southern Title family of companies (title agencies) headquartered in Daytona.