FOR ALL KNIGHT BARRY TITLE GROUP LOCATIONS VISIT US AT KNIGHTBARRY.COM Inside This Issue Tap2Close App Update Knight Barry Celebrates 160 th Article~New Mortgage Satisfaction Law Commercial Corner A Glimpse...or two... Welcome to Knight Barry! Article~The New F Word Knight Barry~Companywide One More! KNIGHT BARRY S Tap2Close MOBILE APP IS NOW AVAILABLE IN ANDROID! 1 1 1 3 4 4 5 6 6 Tap2Close from Knight Barry Title provides Wisconsin home sellers and their real estate agents with a simple and convenient way to estimate sale proceeds. The app collects the seller s mortgage payoff information, prorates the taxes, and calculates commissions, title and other fees/costs associated with a home closing. An estimated closing statement is calculated on the fly and is deliverable via email right from your mobile device. When an offer to purchase has been accepted, you can even start the closing process by ordering title and closing services through the app. Tap2Close is extremely user friendly and can be downloaded for free at the app store on your ipad, iphone or Android device. 160 YEARS! TRUSTED SERVICE SINCE 1854 YESTERDAY, TODAY & TOMORROW... KNIGHT BARRY CELEBRATES ITS 160 TH Knight Barry recently opened new locations in Cedarburg, Hayward, Marshfield, Wausau and Minocqua. As you notice, we ve grown! Did you know that our roots started in downtown Racine before the chocolate bar was invented and before Abraham Lincoln was voted into office? In 1836 a part of Southeastern Wisconsin became known as Racine County. Albert G. Knight arrived in the area that same year and became the Racine County Clerk and County Treasurer. In 1854 Albert opened the title abstract company now known as Knight Barry Title, Inc. His company, responsible for storing the original plats of Racine, kept the plats in a brick vault in his office located next to the Racine County Courthouse. When the courthouse burnt down in 1861 and all the courthouse records were destroyed, (Continued on page 3) HOW WILL WISCONSIN S MORTGAGE SATISFACTION LAW IMPACT REAL ESTATE By Cheri Hipenbecker, General Counsel, and TRANSACTIONS? Scott Hutchison, Branch Counsel Craig Haskins, Cheri Hipenbecker and her husband, Bob, and children, Gavin and Kelsey, attend the signing of the Mortgage Satisfaction Act by Governor Walker. Spring 2014 The State of Wisconsin enacted a new mortgage satisfaction law on December 12, 2013 (2013 Wisconsin Act 66; Section 708.15. Wis. Stats.). There are three main components of the new law: (i) reliable payoff statements, (ii) revisions to penalties if a secured lender does not timely submit a satisfaction of mortgage for recording, and (iii) for residential property only, enables title insurance companies and their authorized agents to record Affidavits of Satisfaction. I. RELIABLE PAYOFF STATEMENTS Prior to the enactment of 2013 Wisconsin Act 66 a secured creditor would provide a payoff statement for a mortgage loan, but the parties receiving the payoff statement did not have a statutory right to rely upon that payoff statement (although an equitable right may have existed). If the secured creditor determined post-closing that the amount received was insufficient to pay the secured (Continued on page 2)
PAGE 2 Spring 2014 (Mortgage Satisfaction Law Continued from page 1) obligation in full (i.e. due to escrow distribution or clerical error), the secured creditor could demand the additional funds as a condition to issuance of the satisfaction of the mortgage. Section 708.15(4), Wis. Stats. addresses this situation and provides that a secured creditor that issues an understated payoff statement may not deny the accuracy of the payoff statement as against any person that reasonably and detrimentally relied upon the understated payoff amount. However, in the event that the secured creditor discovers the understated amount timely, the secured creditor may send a corrected payoff statement and the parties to the transaction must modify the closing documents if they have a reasonable opportunity to act. If the parties in the transaction do not have a reasonable opportunity to act upon the corrected payoff statement, and the secured creditor is paid pursuant to the understated payoff statement, the secured creditor must satisfy the mortgage and may pursue other legal remedies against the borrower (including suing under the promissory note). Section 708.15(4) applies to both residential and non-residential property. Additionally, the secured creditor: (a) must provide the payoff letter to the requesting party within seven business days (a reasonably longer period of time if non-residential real property) (708.15(3)(c)); (b) may not qualify a payoff amount or state that the payoff amount is subject to change (708.15(3)(f)), and (c) must provide upon request one payoff statement without charge during any two month period (Section 708.15(3)(g)). PRACTICE POINTER: Beware of secured creditors who are not familiar with Wisconsin s new law and who continue to charge a fax or other fee when issuing a payoff statement. II. SATISFACTION BY SECURED CREDITOR Consistent with past requirements, a secured creditor must submit a satisfaction of mortgage for recording within 30 days of the receipt of full payment or performance of the secured obligation. Section 708.15 modifies the penalties if the secured creditor fails to timely satisfy the mortgage prior to the enactment of the new law a secured creditor faces penalties of $100 per day, up to a total of $2,000, plus actual damages resulting from the violation (Section 706.05 (10) repealed by 2013 Wisconsin Act 66). Today a secured creditor who fails to timely satisfy the mortgage faces penalties of $500, plus any actual damages caused by the failure, and any reasonable attorney fees and court costs incurred (Section 708.15(5)(b)). Knight Barry presents information on Wisconsin s New Mortgage Satisfaction Law to 17 Lender Managers from ten firms, in the Green Bay area. Knight Barry ranks #1 on itunes video series. Cheri Hipenbecker and Craig Haskins discuss Wisconsin s Mortgage Satisfaction Law in the snapshot of a Knight Barry video pictured above. III. AFFIDAVITS OF SATISFACTION BY TITLE COMPANIES Sections 708.15(8) (11) are entirely new to Wisconsin (having been based on a uniform law published by the Uniform Law Commission), and permit a title insurance company or its authorized agent to record Affidavits of Satisfactions for mortgages not satisfied by a secured creditor. Pursuant to 708.15(11), a properly recorded Affidavit of Satisfaction constitutes a satisfaction of the security instrument (mortgage) described in the affidavit. The title company/agent must follow the steps detailed in 708.15(8)-(10) and generally outlined below: The property encumbered by the security instrument must be residential real property defined as real property located in the state of Wisconsin that is used primarily for personal, family or household purposes and is improved by one to four dwelling units (708.15(1)(m)). The title company/agent must send notice to the secured creditor with the language set forth in 708.15(8), including a statement that the title company/agent believes that the property is residential real property, that the secured creditor has received full payment or performance of the secured obligation, and that the title company/agent may submit for recording an Affidavit of Satisfaction of the security instrument unless, within 30 days after the effective date of the notice, the secured creditor satisfies the security instrument (708.15(8) contains the required language forms are also available on Knight Barry Title Group s website). If, after 30 days from the effective date of the notice to the secured creditor the satisfaction has not been recorded by the secured creditor, the title company/agent may (but has no obligation to) record the Affidavit of Satisfaction (the content of the Affidavit of Satisfaction is set forth in Section 708.15(10)). (Continued on back page)
Spring 2014 PAGE 3 Knight Barry s Commercial Divisions in Milwaukee, Madison, Illinois and Minnesota are very busy! Recent transactions closed by our commercial offices include those listed below. For more information on Knight Barry s Commerical Divisions please contact our Milwaukee, Madison, Illinois or Minnesota office. COMMERCIAL CORNER MILWAUKEE: Stacy Alvarez Business Development Manager (414) 727-4545 stacy@knightbarry.com MADISON: Ned Baxter Commercial Services Manager (608) 255-2700 stacy@knightbarry.com ILLINOIS: Lynn Gray Branch Manager (779) 220-5065 lynn@knightbarry.com MINNESOTA: Colleen Nagle Regional Manager (612) 252-2025 colleen@knightbarry.com $22,470,000 Multi-family purchase/construction - Minneapolis, MN $18,646,000 Multi-family purchase/construction - St. Paul, MN $12,376,000 Multi-family purchase/construction - Mankato, MN $12,000,000 Shopping Center Purchase - Franklin, WI $8,700,000 New Hotel Construction - Franklin, WI $5,200,000 Purchase for National big box new development - Sussex, WI $4,000,000 Purchase for National big box new development - Kenosha, WI $3,300,000 Purchase of a 64-unit apartment complex - West Bend, WI $3,200,000 Purchase of an office building - Mount Pleasant, WI $3,000,000 Purchase of vacant land for new development - Florida $2,800,000 Purchase of a Multi-family apartment complex - Palatine, IL $2,400,000 Purchase of a nationally branded restaurant - Sheboygan, WI $2,300,000 Purchase of an office building - Chicago, IL $2,000,000 Office building refinance - Rockford, IL $1,705,000 Multi-property purchase - Morrison & Savana Illinois $1,600,000 Grocery store purchase - Milwaukee, WI $1,500,000 Retail portfolio loan - Chicago, Maywood & Palos Hills, IL $1,330,000 Multi-family refinance - Rockford, IL $1,300,000 Commercial purchase - Elk Grove Village, IL $1,300,000 Bank branch financing - Rockford, IL $1,300,000 Purchase of Farmland - Harvard, IL $1,250,000 Office building refinance - Chicago, IL $1,200,000 Purchase of an Industrial Park - Wauconda, IL $1,000,000 Restaurant & Bar refinance - Rockford, IL $690,000 New Commercial construction - Glenview, IL (Knight Barry Celebrates 160 th Continued from page 1) Knight Barry s roots began with Albert G. Knight in 1854. Albert s records were used to restore them. In 1902 John W. Knight, Albert s son, and Erastus C. Peck formed Knight & Peck Abstract Company, which eventually became J. W. Knight Company. When J. W. Knight Company merged with the Barry Abstract Company in 1918, the company changed it s name to Knight Barry Abstract Company. At the time, the Barry Abstract company was owned by John P. Barry and Joseph J. Patrick. Both men had a rich history in the Racine community, John was the Register of Deeds and Joseph was the County Clerk, Treasurer, Assessor and Under Sheriff. After the merger Joseph acquired full ownership of the company and later sold it to his children, Glenn J. Patrick, Wallace E. Patrick, and Gladys Patrick Foldy, in the 1950 s Jeffrey B. Green and Estelle Siegman purchased the company from the Patrick siblings in 1979, renaming it Knight Barry Title, Inc. Jeffrey B. Green, purchased Knight Barry Abstract Company in 1979. Today, with nearly 30 offices located throughout Wisconsin, Illinois, Minnesota and Michigan and 250 experienced title professionals, Knight Barry is one of the largest title agencies in the Midwest.
PAGE 4 Spring 2014 A GLIMPSE...or two! Patrick Hugunin - Wausau/Minocqua North/Central Regional Manager Patrick Hugunin is Knight Barry s Regional Manager for the North-Central Region of Wisconsin. Pat brings over 17 years of title and real estate experience to the Wausau and Minocqua areas. Specializing in title insurance and real estate closings, he has vast experience in all areas of the real estate and mortgage lending world. In 1995 Pat graduated from Pennsylvania State University with a Bachelor of Science degree in Accounting and minor in the Legal Environment of Business. After graduation, Pat joined the staff of a Maryland bases title agency, where he gained knowledge and expertise in title insurance, real estate closings, and customer service. In 2002, Pat moved to Antigo, Wisconsin, where he accepted the Branch Manager position for a title company in Merrill, Wisconsin. During this time his knowledge, expertise, and get-it-done attitude helped him develop a strong and loyal customer base in numerous markets in the northwoods. Pat joined Knight Barry Title in late 2013. When he s not traveling around the northwoods for work, Pat enjoys spending his time golfing, ice fishing in the winter, and fly-fishing in the spring and summer. He also serves as Secretary for the Antigo Chapter of Trout Unlimited. Renee Donaghue - Hayward North/West Regional Manager Renee is Knight Barry s Regional Manager for Sawyer County and her office is located in Hayward, Wisconsin. Renee is quite familiar with Up North since she was raised Tomah, WI and moved to the northwoods in 1986, where her family had a cabin since the early 1950 s. Renee graduated from Park University with a Bachelor of Science degree in Management, Accounting and Secondary Mathematics Certification. She started her career in the title industry in 1992 and has since become well rounded in her knowledge by working with final policies, accounting, title searches and title examinations. In 2004 Renee purchased Sawyer County Abstract, which grew to service all of Northern Wisconsin; including Douglas, Bayfield, Ashland, Sawyer, Burnett, Washburn, and Rusk. Knight Barry Title purchased Sawyer County Abstract in late 2013 and Renee came on board as the Regional Manager and Searcher for seven plus counties in Northwestern Wisconsin. Renee is in her car daily traveling to the various County courthouses to run title searches - with all that windshield time, she listens to a lot of books on tape! Renee has two very active boys, age twelve and fourteen, and much of her down time is spent being involved in their activities; football, basketball, and Boy Scouts. Just like her sons, Renee is also very active; she coaches basketball, plays league volleyball, enjoys half marathons and mud runs, snowmobiling, four wheeling, trap shooting, hunting, bike riding and watching football! WELCOME! We welcome the following new employees to our Knight Barry Title Group family! ANGIE BODENHEIMER East - Branch Manager KIMBERLY DIEDRICK East - Title Searcher ROSANNA VANDER LOOP East - Title Examiner MELISSA DIEDRICH East - Closing Coordinator AMANDA SCHEIBE East - Closing Coordinator CATHERINE SKELL East - Account Execu ve FRAN ULLMAN East - Administra ve Assistant MICHELE CURRY FOND DU LAC, WI Title Examiner RENEE DONAGHUE Branch Manager LEE ANN TRAEGER GREEN BAY, WI Account Execu ve ELLY THOMPSON WAUSAU, WI Title Examiner PAMELA LEIH WAUSAU, WI Closing Agent & Business Development Officer TAMARA KADLEC Administra ve Assistant KARMEN PEARSON Administra ve Assistant SHARON AUBART Closing Coordinator MARY DENK MARSHFIELD, WI Closing Agent & Business Development Officer MARY DOMANICO MARSHFIELD, WI Title Examiner RHONDA MCBRIDE MARSHFIELD, WI Closing Agent
Spring 2014 PAGE 5 The New F Word By Cheri Hipenbecker, General Counsel Growing up I knew that all bad words consisted of four letters. And as a parent today, this is still true! But the new F word has five letters: fraud. Fraudsters have moved beyond the days of sending emails asking for money to get an uncle out of jail in Zimbabwe or to access the supposed inheritance left by the late king of Nigeria. The fraudsters have moved to U.S. real estate transactions. For them, what better industry to attack than the U.S. real estate industry? What other industry involves so many parties and so much money? Billions of dollars are at risk each year. The three schemes below could strike at any moment. And if they do strike, you ll know the best practices to keep you safe. Scheme 1: Stealing buyer money The sophisticated fraudster hacks into the REALTOR s computer and lurks for days, weeks and even months, waiting for the best payday. That payday is when the fraudster sees an email from a title company directing a deposit of buyer funds. The fraudster strikes by creating a phony email that appears to originate from a legitimate party and appears to include legitimate wire transfer instructions instructions that if followed, will transfer the buyer s money directly into the fraudster s bank account. The fraudsters are good but not perfect. Command of the English language is lacking, and the email address will be wrong but only slightly, so it s up to you to figure out if the information is correct. In a recent Wisconsin transaction, a buyer s agent received a legitimate email from my title company, Knight Barry Title, instructing the buyer to bring a cashier s check to closing. The fraudster lurking on the agent s computer saw the opportunity to act. Within 24 hours of the first email, the buyer s agent received a second email this time from the fraudster which appeared to originate from the closer at Knight Barry (even including the closer s signature line), and appeared to include Knight Barry wire transfer instructions. Had the buyer followed the instructions in the fraudster's email, the buyer s money over $250,000 would have been gone and possibly the buyer s agent would have been sued. Fortunately, the buyer s agent was smart and smelled something wrong the grammar was odd, and the wire transfer instructions looked unprofessional, including an eight-digit ABA number. But the most telling was the email address: Knight Barry email addresses end in @knightbarry.com ; the fraudster s email address ended in @knightbarry.com.ch.vc. Best practices:. Secure your computer systems and email accounts.. Call to verify wire instructions.. Check grammar, punctuation and formatting. Is something off?. Verify the sender s email. Does the email match perfectly with other emails from that same sender? Or does the email address include additional letters after the @ sign?. Test yourself: The same principles apply to creating a phony email as to faking a website. The Phishing Quiz on the OpenDNS website can help you find out how good you are at spotting scams. Visit www.opendns.com/phishing-quiz to take the quiz. Full disclosure, the writer of this article only scored 12 out of 14. Scheme 2: Stealing seller money Snap a picture, deposit a check. Within just one minute, a fraudster seller can deposit a proceeds check into their bank account using mobile banking and then turn around and ask the closer to cut another check or wire the proceeds. The end result? The seller fraudster is paid twice. Best practice: Confirm how the seller is to receive proceeds, whether check or a wire transfer, before the closing, and don t change that at the closing. Scheme 3: Bad Check A recent scam in Wisconsin involving about $90,000 occurred where both the buyer and the seller were in on the scam. The buyer brought a $90,000+ cashier s check to closing, the title company deposited the check and on the same day wired out the seller proceeds. The buyer s check never cleared as it was either a bad check, or the buyer stopped payment on the check. The seller kept the money, and the title company was out the $90,000 because it wired someone else s money to the seller probably from your closing the day earlier. Oops, unfortunate title company. A slight variation in this scam could make the REALTOR unfortunate. Say the buyer has a check for the purchase price, and the title company deposits the check and wires out the seller proceeds the same day. Assume the check bounces and the seller, who is not in on the scam, returns the funds to the title company since the buyer didn t come to closing with good funds. So the situation seems to fall back to the status quo, right? Wrong. The deed has been recorded, and the fraudster buyer turns around and sells the property to an innocent third party. This situation has gone from bad to worse: now two (Continued on back page)
Knight Barry TITLE GROUP Integrity. Experience. Innovation. CORPORATE OFFICE: 400 Wisconsin Avenue Racine, WI 53403 262-633-2479 (Fax) 262-633-4928 www.knightbarry.com (Mortgage Satisfaction Law continued from page 2) All title & closing services are produced & distributed 100% by our United States employees right here in Wisconsin, Illinois, Minnesota & Michigan PRACTICE POINTERS: The Affidavit of Satisfaction sections of 708.15 applies both on a go forward basis and for mortgages paid pre-2014. This is important as a vast number of mortgages which were paid during the Great Recession remain unsatisfied of record due to varying circumstances including lenders who failed and were taken over by the FDIC, loans being assigned multiple times with no record of the assignments and, unfortunately, simple oversight. If your client/customer comes to you today concerned about a mortgage against his/her residential property which was paid, but remains unsatisfied of record, please ask your client/customer to produce a copy of the HUD-1 Settlement Statement and title commitment/policy from your client s/customer s most recent refinance/purchase of the property. Then provide the HUD-1 Settlement Statement and title commitment/policy to the current title company/agent who can facilitate sending notice to the secured creditor under Section 708.15(8) and, if necessary, the recording of the Affidavit of Satisfaction. For more information about Wisconsin s new mortgage satisfaction law, please see videos posted on www.knightbarry.com (The New F Word continued from page 5) parties claim of ownership in the home one, the seller on the first transaction who wasn t paid but gave a deed, and two, the buyer on the second transaction. Litigation will certainly ensue, and the REALTORS will be involved. Best practice: Follow the mantra wire in, wire out; check in, check out. Never wire funds or have the title company wire funds until the depositing check has cleared, or you might find yourself in court. Up front diligence, pause and protection are the only means to stop a fraudster because guess what? Fraudsters don t return money. Knight Barry ranks #1 on itunes video series! Knight Barry-Companywide Racine Anna Marie Aiello, Business Development Manager, Racine, accepts the Racine Kenosha Builders Association s (RKBA) 2013 Rising Star award. This award honors the outstanding member(s) who have actively worked toward the betterment of the housing industry and association by exceeding expectations over the last twelve months and are considered to be rising within the association. Lake Geneva Shelley Perry, Branch Manager, Lake Geneva, and Co-Chair of the 2013 Ladies Day Luncheon, Geneva Lake Women s Association, proudly hands Margaret Downing a check for $1,200 for the Walworth County Alliance for Children (WCAC). Professionals at the WCAC evaluate and investigate child abuse cases and offer support to children and their families. Green Bay ONE MORE! Knight Barry s Racine office joined the RKBA in 2011. Given the late spring weather, we thought this picture fitting! During the holiday season, our Green Bay office went on a five hour festive adventure; blitzing through 16 stops and warming 148 Knight Barry customers with hot chocolate, topped with whipped cream and magic dust (marshmallows)! We promise a round of ice cold lemonade in the warmer days ahead!