Text: SF02439 Text: SF02441 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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 onthe guarantiesany guaranty, closing 1 9 protection letter, or gap coverage. 1 10 Sec. 2. Section 16.92, subsection 1, paragraph f, 1 11 subparagraph (4), Code Supplement 1999, is amended to read as 1 12 follows: 1 13 (4) If after payment of the unpaid balance of the loan 1 14 secured by the mortgage, the mortgage continues to secure any 1 15 unpaid obligation due the mortgagee or any unfunded commitment 1 16 by the mortgagor to the mortgagee,the legal description of1 17the property that will continue to be subject to the mortgage,1 18andthe legal description of the property that will be 1 19 released from the mortgage. 1 20 Sec. 3. Section 16.92, subsection 2, paragraph a, 1 21 subparagraph (1), subparagraph subdivision (b), Code 1 22 Supplement 1999, is amended to read as follows: 1 23 (b) The statement contains the legal description of the 1 24 property to be released from the mortgageand the legal1 25description of the property that will continue to be subject1 26to the mortgage. 1 27 Sec. 4. Section 16.92, subsection 3, paragraph d, 1 28 subparagraph (2), Code Supplement 1999, is amended to read as 1 29 follows: 1 30 (2) A statement that the certificate is a partial release 1 31 of the mortgage,and the legal description of the property 1 32 that will be released from the mortgage, and the legal1 33description of the property that will continue to be subject1 34to the mortgage. 1 35 Sec. 5. Section 16.92, subsection 7, Code Supplement 1999, 2 1 is amended to read as follows: 2 2 7. PRIOR MORTGAGES. 2 3 a. If the real estate lender or closer has notified the 2 4 division that a mortgage has been paid in full by someone 2 5 other than the real estate lender or closer, or was paid by 2 6 the real estate lender or closer under a previous transaction, 2 7 and an effective release has not been filed of record, the 2 8 division may execute and record a certificate of release 2 9 without certification by the real estate lender or closer that 2 10 payment was made pursuant to a payoff statement and the date 2 11 payment was received by the mortgagee. A certificate of 2 12 release filed pursuant to this subsection is subject to the 2 13 requirements of subsection 2, paragraph "c". 2 14 b. For purposes of this subsection, an effective release 2 15 has not been filed of record if there appears that a mortgagee 2 16 in the record chain of title to the mortgage has not, either 2 17 on the mortgagee's own behalf or by the mortgagee's duly 2 18 appointed servicer or attorney in fact as established of 2 19 record by a filed servicing agreement or power of attorney, 2 20 filed of record either an assignment of the mortgage to 2 21 another mortgagee in the record chain of title to the mortgage 2 22 or a release of the mortgagee's interest in the mortgage. For 2 23 the purposes of this subsection and subsection 2, paragraph 2 24 "c", "mortgage servicer" includes a mortgagee for which an 2 25 effective release has not been filed of record as provided in 2 26 this paragraph. 2 27 Sec. 6. NEW SECTION. 16.93 CLOSING PROTECTION LETTERS. 2 28 1. The authority through the title guaranty division may 2 29 issue a closing protection letter to a person to whom a 2 30 proposed title guaranty is to be issued, upon the request of 2 31 the person, if the division issues a commitment for title 2 32 guaranty or title guaranty certificate. The closing 2 33 protection letter shall conform to the terms of coverage and 2 34 form of the instrument as approved by the division board and 2 35 may indemnify a person to whom a proposed title guaranty is to 3 1 be issued against loss of settlement funds due to only the 3 2 following acts of the division's named participating attorney 3 3 or participating abstractor: 3 4 a. Theft of settlement funds. 3 5 b. Failure by the participating attorney or participating 3 6 abstractor to comply with written closing instructions of the 3 7 person to whom a proposed title guaranty is to be issued 3 8 relating to title certificate coverage when agreed to by the 3 9 participating attorney or participating abstractor. 3 10 2. A closing protection letter shall only be issued to a 3 11 person to whom a proposed title guaranty is to be issued for 3 12 real property transactions in which the division has committed 3 13 to issue an owner or lender certificate and for which the 3 14 division receives a premium and other payments or fees for a 3 15 title guaranty certificate or other coverage. 3 16 3. The division board shall establish the amount of 3 17 coverage to be provided and may distinguish between classes of 3 18 property including, but not limited to, residential, 3 19 agricultural, or commercial, provided that the total amount of 3 20 coverage provided by the closing protection letter shall not 3 21 exceed the amount of the commitment or title guaranty to be 3 22 issued. Liability under the closing protection letter shall 3 23 be coextensive with liability under the certificate to be 3 24 issued in connection with a transaction such that payments 3 25 under the terms of the closing protection letter shall reduce 3 26 by the same amount the liability under the title guaranty 3 27 certificate and payment under the title guaranty certificate 3 28 shall reduce the liability under the terms of the closing 3 29 protection letter. 3 30 4. The division may adopt a required fee for providing 3 31 closing protection letter coverage. 3 32 5. The division shall not provide any other coverage which 3 33 purports to indemnify against improper acts or omissions of a 3 34 person with regard to escrow, settlement, or closing services. 3 35 6. The authority shall adopt rules pursuant to chapter 17A 4 1 as necessary to administer this section. 4 2 EXPLANATION 4 3 This bill allows the Iowa finance authority through the 4 4 title guaranty division to issue a closing protection letter 4 5 to a person to whom a proposed title guaranty is to be issued, 4 6 upon the request of the person, if the division issues a 4 7 commitment for title guaranty or title guaranty certificate. 4 8 The bill provides that the closing protection letter may only 4 9 indemnify a person to whom a proposed title guaranty is to be 4 10 issued against loss of settlement funds due to the theft of 4 11 settlement funds and the noncompliance with written closing 4 12 instructions relating to title certificate coverage. 4 13 The bill provides that a closing protection letter shall 4 14 only be issued to a person to whom a proposed title guaranty 4 15 is to be issued for real property transactions in which the 4 16 division has committed to issue an owner or lender certificate 4 17 and for which the division receives a premium and other 4 18 payments or fees for a title guaranty certificate or other 4 19 coverage. 4 20 The bill provides that the division may establish fees and 4 21 the amount of coverage which shall not exceed the amount of 4 22 the commitment or title guaranty to be issued. 4 23 The bill prohibits the division from providing any other 4 24 coverage which purports to indemnify against improper acts or 4 25 omissions of a person with regard to escrow, settlement, or 4 26 closing services. 4 27 The bill provides that a title guaranty, closing protection 4 28 letter, or gap coverage issued by the division is an 4 29 obligation of the division and not an indebtedness or 4 30 liability of the state. 4 31 The bill provides that, in the context of prior mortgages, 4 32 an effective release has not been filed of record if there 4 33 appears that a mortgagee in the record chain of title to the 4 34 mortgage has not filed of record either an assignment of the 4 35 mortgage to another mortgagee in the record chain of title to 5 1 the mortgage or a release of the mortgagee's interest in the 5 2 mortgage. 5 3 LSB 5305SZ 78 5 4 tm/as/5
Text: SF02439 Text: SF02441 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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