Legislative Developments

Rhode Island Gov. Lincoln Chafee has signed a bill that addresses attorney/client privilege in title insurance by providing that a title producer who is also an attorney may identify and redact any documents containing privileged materials that are requested by a title insurer in an audit. The bill, SB 2816, was introduced by Sens. Marc Cote, D-Woonsocket/North Smithfield, and Roger Picard, D-Woonsocket/Cumberland.

The General Assembly of Pennsylvania is considering a bill that amends the state’s mechanic’s lien law by providing a definition of “cost of construction,” providing for the right to lien, for priority of lien and for discharge or reduction of lien on payment into court or entry of security.

Missouri Gov. Jay Nixon has signed a bill that specifies the order of preferences of liens and encumbrances on unit owners of a leasehold condominium. The bill, HB 1218, was sponsored by Rep. Tony Dugger, R-Hartville.

The Rhode Island General Assembly passed legislation that permits title insurance companies and their agents to issue closing funds protection insurance on residential property closings for property consisting of four units or less. Under current law, a title insurer is expressly authorized to issue closing or settlement protection to a proposed insured upon request if the title insurer or its title agent issues a preliminary report, binder or title insurance policy.

The New Jersey Senate has introduced a bill that would prohibit escrow agent evaluation services from charging escrow agents fees for their services. The bill, SB 2203, was introduced by Sen. Kevin O’Toole, R-Wayne.

A bill designed to afford relief to domesticated title insurers in New York State while continuing to hold them responsible for the premiums assessed by law and used for the operation of the state’s department of financial services, was introduced in the New York State Assembly. The bill, AB 10090, titled the Title Insurance Assessment Relief Act, is being sponsored by Assembly Member Kevin Cahill, D-Kingston.

The California General Assembly has amended a bill that would address the way lines of credit are released and closed. Read on to find out more about the bill and how it changed.

The Illinois General Assembly passed a bill that would amend the mechanic’s lien law by clarifying that an agreement to subordinate a lien under the Mechanic’s Lien Act is against public policy and unenforceable. The bill, SB 3023, was introduced by Sen. John Mulroe, D-Chicago.

On June 9, the U.S. House of Representatives unanimously passed H.R. 3211, the Mortgage Choice Act. The bill amends the qualified mortgage (QM) definition in the Dodd Frank Act, designed to improve access to credit and qualified mortgages for low and moderate income borrowers while protecting consumers from bad loans. The bill, sponsored by Rep. Bill Huizenga, R-Michigan, specifically clarifies the treatment of insurance and taxes held in escrow and removes affiliated title fees from the points and fees calculation under the Ability to Repay Rule.

The South Carolina General Assembly adopted a bill that provides that mortgagees of record, the owner or holder of the debt instrument secured by the mortgage, the trustee or beneficiary of a deed of trust, or the legal representative or attorney-in-fact of any of those parties may execute a mortgage satisfaction or deed of trust release. The bill, HB 3134, was introduced by Reps. Wendy Nanney, R-Greenville, and Bill Taylor, R-Aiken.