Legislative Developments

The Louisiana State Legislature is considering a bill that would prohibit the required use of settlement service providers in residential real estate transactions. This would expand RESPA’s required use prohibition in the state. The bill, SB 426, was introduced by Sen. Eric LaFleaur, D-Ville Platte. The proposed law would provide that no contract to sell or purchase residential real estate executed in Louisiana could contain any provision requiring the purchaser, as a condition of sale, to use a specific provider of settlement services.

Virginia Gov. Terry McAuliffe has signed a bill that creates an affidavit to correct errors in deeds, deeds of trust and mortgages. The bill, SB 116, was introduced by Sen. John Watkins, R-Modlothian. The new law states that obvious description errors in a recorded deed, deed of trust or mortgage purporting to convey or transfer an interest in real property may be corrected by recording an affidavit in the land records of the circuit court for the jurisdiction where the property is located or where the deed, deed of trust or mortgage needing correction was recoded.

The Illinois General Assembly is considering 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. Under current law, any contractor or subcontractor who does work on a tract of land has a right to place a lien on the property for the amount due to him or her for the work performed on the property. The parties may not enter into an agreement whereby the contractor or subcontractor waives their right to enforce or claim the lien. The bill would now address the subordination of mechanic’s liens.

Currently, “breach of security” is defined as an “unauthorized acquisition of personal information maintained in computerized form by a person that compromises the security, confidentiality or integrity of the personal information. Senate File 2259 expands the definition to include the “unauthorized acquisition of personal information maintained by a person in any medium, including on paper, that was transferred by the person to that medium from computerized form and that was compromises the security, confidentiality or integrity of the personal information.”

South Dakota Gov. Dennis Daugaard signed a bill adopting the uniform real property electronic recording act. Under SB 68, if a law requires, as a condition for recording, that a document be an original, be on paper or another tangible medium, or be in writing, the requirement is now satisfied by an electronic document satisfying the provisions of this act. If a law requires or refers to something related to tangible media, the requirement or reference is satisfied by an electronic document.

Recording legislation has officially become law in at least two states.

Insurance professionals providing title policies in New York joined those in 47 other states that require a license as the result of a provision included in the state’s 2014-15 budget signed by Gov. Andrew Cuomo on April 1. Representatives of the New York State Land Title Association (NYSLTA) worked closely with state officials to reach consensus on this important bill. In recent weeks, NYSLTA provided direct feedback that would protect buyers from unscrupulous practices, create greater transparency, establish a more robust regulatory structure and avoid unintended consequences that can occur in the absence of knowledgeable and experienced title professionals. The legislation’s major provisions are designed to ensure heightened consumer protections and define industry standards.

The Maryland General Assembly has passed a bill to include certain escrow costs in the calculation to determine whether a refinance mortgage shall have, on recordation, the same line priority as the first mortgage or deed of trust that the refinance mortgage replaces. The bill now awaits the signature of the governor.

The Connecticut General Assembly is considering a bill that would require title insurers to issue closing protection letters for any loan insurance policy insuring a lender interest on residential property. Read on for more details.

The Maryland General Assembly has passed a bill that alters the formula in accordance with which a title insurer domiciled in the state shall reduce the reserves applicable to title insurance contracts for purposes of the unearned premium reserves. The bill now goes to the governor for his signature.