Text: HSB00591                          Text: HSB00593
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

House Study Bill 592

Bill Text

PAG LIN
  1  1    Section 1.  Section 16.91, subsection 2, Code 1999, is
  1  2 amended to read as follows:
  1  3    2.  A title guaranty, closing protection letter, or gap
  1  4 coverage issued under this program is an obligation of the
  1  5 division only and claims are payable solely and only out of
  1  6 the moneys, assets, and revenues of the title guaranty fund
  1  7 and are not an indebtedness or liability of the state.  The
  1  8 state is not liable on the guaranties any guaranty, closing
  1  9 protection letter, or gap coverage.
  1 10    Sec. 2.  NEW SECTION.  16.93  CLOSING PROTECTION LETTERS.
  1 11    1.  The authority through the title guaranty division may
  1 12 issue a closing protection letter to a person to whom a
  1 13 proposed title guaranty is to be issued, upon the request of
  1 14 the person, if the division issues a commitment for title
  1 15 guaranty or title guaranty certificate.  The closing
  1 16 protection letter shall conform to the terms of coverage and
  1 17 form of the instrument as approved by the division board and
  1 18 may indemnify a person to whom a proposed title guaranty is to
  1 19 be issued against loss of settlement funds due to only the
  1 20 following acts of the division's named participating attorney
  1 21 or participating abstractor:
  1 22    a.  Theft of settlement funds.
  1 23    b.  Failure by the participating attorney or participating
  1 24 abstractor to comply with written closing instructions of the
  1 25 person to whom a proposed title guaranty is to be issued
  1 26 relating to title certificate coverage when agreed to by the
  1 27 participating attorney or participating abstractor.
  1 28    2.  A closing protection letter shall only be issued to a
  1 29 person to whom a proposed title guaranty is to be issued for
  1 30 real property transactions in which the division has committed
  1 31 to issue an owner or lender certificate and for which the
  1 32 division receives a premium and other payments or fees for a
  1 33 title guaranty certificate or other coverage.
  1 34    3.  The division board shall establish the amount of
  1 35 coverage to be provided and may distinguish between classes of
  2  1 property including, but not limited to, residential,
  2  2 agricultural, or commercial, provided that the total amount of
  2  3 coverage provided by the closing protection letter shall not
  2  4 exceed the amount of the commitment or title guaranty to be
  2  5 issued.  Liability under the closing protection letter shall
  2  6 be coextensive with liability under the certificate to be
  2  7 issued in connection with a transaction such that payments
  2  8 under the terms of the closing protection letter shall reduce
  2  9 by the same amount the liability under the title guaranty
  2 10 certificate and payment under the title guaranty certificate
  2 11 shall reduce the liability under the terms of the closing
  2 12 protection letter.
  2 13    4.  The division may adopt a required fee for providing
  2 14 closing protection letter coverage.
  2 15    5.  The division shall not provide any other coverage which
  2 16 purports to indemnify against improper acts or omissions of a
  2 17 person with regard to escrow, settlement, or closing services.
  2 18    6.  The authority shall adopt rules pursuant to chapter 17A
  2 19 as necessary to administer this section.  
  2 20                           EXPLANATION
  2 21    This bill allows the Iowa finance authority through the
  2 22 title guaranty division to issue a closing protection letter
  2 23 to a person to whom a proposed title guaranty is to be issued,
  2 24 upon the request of the person, if the division issues a
  2 25 commitment for title guaranty or title guaranty certificate.
  2 26 The bill provides that the closing protection letter may only
  2 27 indemnify a person to whom a proposed title guaranty is to be
  2 28 issued against loss of settlement funds due to the theft of
  2 29 settlement funds and the noncompliance with written closing
  2 30 instructions relating to title certificate coverage.
  2 31    The bill provides that a closing protection letter shall
  2 32 only be issued to a person to whom a proposed title guaranty
  2 33 is to be issued for real property transactions in which the
  2 34 division has committed to issue an owner or lender certificate
  2 35 and for which the division receives a premium and other
  3  1 payments or fees for a title guaranty certificate or other
  3  2 coverage.
  3  3    The bill provides that the division may establish fees and
  3  4 the amount of coverage which shall not exceed the amount of
  3  5 the commitment or title guaranty to be issued.
  3  6    The bill prohibits the division from providing any other
  3  7 coverage which purports to indemnify against improper acts or
  3  8 omissions of a person with regard to escrow, settlement, or
  3  9 closing services.
  3 10    The bill provides that a title guaranty, closing protection
  3 11 letter, or gap coverage issued by the division is an
  3 12 obligation of the division and not an indebtedness or
  3 13 liability of the state.  
  3 14 LSB 5305DP 78
  3 15 tm/as/5.1

Text: HSB00591                          Text: HSB00593
Text: HSB00500 - HSB00599               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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