NC Mortgage Satisfaction Act S.L. 2005-123 [SB 734] 2005 NCARD Annual Conference Pinehurst NC August 29, 2005 1
The future ain t what it used to be YOGI BERRA 2
Why does NC need a Mtg Sat Act? PERSPECTIVE from Across the Counter: States with varying penalties & forms Lenders more apt to cancel in states with stiffer penalties Accommodate e-recording High rejection rates Importance of recognizing Substance over Form 3
NCCUSL Drafting Committee Attorneys in private practice Technology companies (MERS & Orion) Lenders (Wachovia, Bank of America, Countrywide, ABN-AMRO) Title insurance companies Professors (Advisors, Executive Officers & Reporter) Geographically from CT to AL to HI 4
COMPROMISE!! Compromise between stakeholders in real property industry: Attorneys Title Companies Lenders Technology groups Servicing organizations Registers of Deeds CONSUMERS!! 5
Legislative Process - MSA Draft language circulated Bill as is virtually unchanged since introduction Lobbyists for NCBA, NCLTA, RPS, & NCARD worked legislature Representatives from organizations appeared together in committee meetings 6
Benefits of MSA Legal Community REQUIRES SATISFACTION of LIEN SELF-HELP PROVISION BY SATISFACTION AGENT Retroactive to clear prior outstanding liens SPECIFIC REASONS FOR REJECTION BY REGISTERS OF DEEDS GS 45-36.10(b), -36.18(c), -36.20(e) INCLUDES PROVISION FOR REINSTATING LIENS SATISFIED IN ERROR 7
Benefits of MSA - Recorders More uniform satisfaction forms from filers across the nation Identifies original secured party rather than trustee Reduce time and costs associated with handling rejections Better serves our constituents Changes to cancellation process reduces backlog(s) of satisfactions, and Reduces registers liability 8
Elements of NC s Mtg Satisfaction Act New rules apply to security documents processed on or after Oct 1, 2005, despite the date received, executed or satisfied Satisfaction rejected on Sept 1 may be processed after Oct 1 Backlog of satisfactions received prior to Oct 1 should be processed using new rules after Oct 1 New standard forms (GS 45-36 sec 10, 16, 20) Fully completed C/Sat form satisfies requirement of new Satisfaction of Security Instrument Fully completed N/Sat form satisfies requirements of new Trustee Sat and Sat of Security Instrument 9
Elements of NC s Mtg Satisfaction Act Determining validity of satisfaction is responsibility of attorney certifying title Registers should NOT respond to questions about D/T being cancelled Eliminates entry of satisfaction, verification & marginal notation by register of deeds (GS 45-37) Specific reasons for rejection of Satisfaction document Not submitted by a method accepted by the register Lacks required elements of notary acknowledgment 10
Elements of NC s Mtg Satisfaction Act Registers verification of documents that require notary acknowledgment GS 47-14(a) requires register to verify that signature, seal (if required) and expiration date are present. G.S. 161-10(a)(16) reads as rewritten:"(16) Probate. For verification of proofs and acknowledgements as provided in G.S. 47-14 two dollars ($2.00)." Register NOT required to verify legal sufficiency of acknowledgment authority of officer that took the acknowledgment legal sufficiency of the document 11
Elements of NC s Mtg Satisfaction Act Register no longer certifies the acknowledgment: Not responsible for the form of the acknowledgment Not responsible for details of corporate acknowledgment Not responsible for determining elements of atty-in-fact acknowledgment Various forms of acknowledgment questioned in the past are acceptable if required elements are present Provisions of GS 47-2 and 47-2.2 still apply 12
Elements of NC s Mtg Satisfaction Act Register s responsibility to record corrected documents [GS 47-14(a)] Any document previously recorded may be rerecorded Certified copy of any document previously recorded may be re-recorded Not register s responsibility to determine if document or certified copy has been changed or altered or if it is being re-recorded pursuant to GS 47-36.1 13
Elements of NC s Mtg Satisfaction Act Change in definition of subsequent instrument and indexing requirements [GS 161-14.1] -Register must determine if document qualifies as subsequent instrument -Indication must be in title or in first 2 pages of subsequent document 14
Elements of NC s Mtg Satisfaction Act Change in definition of subsequent instrument and indexing requirements - cont. Indexing requirements: Parties to the subsequent instrument Original parties as named in the subsequent instrument Reference recording data of original as stated in subsequent instrument with each name indexed. 15
Other legislation of interest Simultaneous recording priority (GS 47-18 & GS 47-20 SL 2005-212) Document number determines priority for simultaneous records Book & page numbers determine priority if register does not use document numbers 16
What Does the Future Hold? Priority Issues paper, mail, overnight, electronic documents Further clean-up of statutes affected by changes to Notary statutes Work together to accomplish what needs to happen. 17
Thanks to Panel Members: Charles (Chuck) Szypszak Associate Professor, School of Government Nancy Short Ferguson VP, Chicago Title Insurance Kathleen Egan Sr VP & Ass t Counsel, Wachovia Mortgage Bob Thompson Attorney, Moore County Bar and to Charles Moore, Moderator 18