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Interesting..Article from 2003 Title Insurance Guidelines on how to deal with missing mortgage assig

Posted on Monday, December 13, 2010

LandAmerica Adopts New Underwriting Position: Assignments of Mortgages
Suppose you’ve just sold your investment or income producing property and have a signed contract of sale. Is it too
late to do a 1031 Exchange? Certainly not. As long as the relinquished property transaction has not closed, you’re
eligible for the deferral of capital gain taxes. In fact, most prospective exchangers contact a qualified intermediary right
at this point. As long as you enter into an exchange agreement before you close, you’re okay. You can even sign the
exchange documents right at the closing. For outstanding qualified intermediary services, call us at 1-888-NOW-1031.
The 1031 Zone -
Am I Too Late To Do An Exchange?
By: Jordan E. Kanter, Esq., V.P., Director of Florida 1031 Exchange Services
LandAmerica has adopted a new underwriting position regarding assignments of mortgages. The following new guidelines apply to
assignments of mortgages where the property to be insured is a 1 to 4 family residential sale or refinance:
1. Recorded release appears in chain of title - Where a release of mortgage in proper form appears in the chain of title, and the
release was executed by an institutional lender that was the assignee under the last recorded assignment of the mortgage, title may be
insured without exception for the mortgage and without further requirement, notwithstanding any missing, extra or improper assignments
(for example, improperly drafted or executed assignments) that occurred prior to the assignment to the lender that released the mortgage.
Example: Your title examination reveals four recorded assignments of a mortgage, all to institutional lenders.
However, between the second and third assignments, there is a break in the chain, i.e., there is no recorded
assignment from the second lender to the third lender. The last assignee of record properly released the mortgage.
The Company will rely on the release without any corrective requirements concerning any missing assignments or
extra assignments that occurred prior to the assignment into the lender that released the mortgage.
2. Mortgage to be released in current transaction - Where the mortgage in question will be released as part of the current
transaction, and the institutional lender that will release the mortgage is named as assignee under the last recorded assignment, title may
be insured without exception for the mortgage and without further requirement, notwithstanding any missing, extra or improper assignments
that occurred prior to the assignment to the institutional lender that will release the mortgage.
Example: Your title examination reveals four recorded assignments of a mortgage, all to institutional lenders. The
last assignment names ABC Lender as assignee, and the payoff and release will come from ABC Lender. The
Company will rely on ABC Lender’s release without any corrective requirements concerning any missing, extra or
improper assignments that occurred prior to the assignment into ABC lender (the lender releasing the mortgage).
CAUTION: These guidelines will not apply, and corrective requirements must be made regarding missing assignments, extra or improper
assignments, under the following circumstances:
1. The Agent has knowledge or reason to suspect that an assignee that has not properly assigned its interest in the mortgage
claims or will claim to be the valid holder of the mortgage. Such knowledge would include, but not be limited to, threatened or existing
litigation.
2. Where the institutional lender that will release (in the current transaction) or has released (in the chain of title) the mortgage is
not or was not the assignee under the last assignment of record. If several assignments were recorded on the same day, caution must be
exercised in determining which assignment was the last assignment.
3. The property to be insured is not a 1 to 4 family residential sale or refinance, i.e., commercial or industrial property.
By: Mickey Godat, Esq.


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