Flat Fee Recording in Michigan

Jienelle R. Alvarado an Attorney at our sister company, Schneiderman & Sherman, P.C. is the author of the below article on flat rate recording in Michigan published in the DSNews.

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Michigan’s governor recently signed bills SB-0599 and HB-5165 into law, which amend MCL 600.2567 and MCL 565.412. These amendments, which take effect on October 1, 2016, modify the fees associated with recording mortgages, assignments, judgments and other documents in the majority of counties for the State of Michigan.

At the present, to record a mortgage, the county charges $14.00 for the first page ($15.00 in Wayne County) and $3.00 for each additional page.Effective October 1, 2016, however, the fee for recording a mortgage, assignment, release, deed or judgment for the majority of Michigan counties is $30.00 (“flat fee”), regardless of the number of pages.[1] Charter counties, such as Macomb and Wayne, have the right to opt out of the changes and, instead, create their own home rule charters tailored to their unique circumstances as specified in the Charter County Act, MCL 45.501 et seq.

Proponents of the flat fee highlight benefits to consumers, lenders, settlement agents and the register of deeds (“ROD”). For example, the flat fee provides consumers certainty as to the cost of recording real estate documents. With respect to the recording of mortgages, in most instances, consumers benefit from the $30.00 cap. In addition, the flat fee will reduce the ROD’s burdens of counting pages and rejecting recording submissions based on an incorrect page count. Most importantly, perhaps, is the benefit all parties to a real estate transaction should experience. Specifically, the flat fee should expedite the closings of real estate transactions otherwise delayed as a result of lender compliance with Consumer Financial Protection Bureau (“CFPB”) regulations. Specifically, the CFPB regulations require lenders to provide consumers with exact recording charges, as part of the Closing Disclosure document (“CD”), not less than three days before closing. The page length of a mortgage, however, can vary based on the lender, the type of real estate, the size of the real estate’s legal description, the number of signing parties, the type of mortgage loan, and/or whether a lender prepares a mortgage for print on letter or legal size paper. Consequently, the lender may not have an accurate page number count three days before closing. If the recording charges the lender states in the CD turn out to be incorrect, the parties cannot close on schedule. Therefore, starting October 1, 2016, consumers, settlement agents, and lenders should see substantially fewer real estate closing delays with respect to instrument recording fee calculation.

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[1] As has always been the case, if a discharge or assignment attempts to discharge or assign multiple mortgage liens in the same county by single discharge or assignment, the county will continue to charge an additional $3.00 per mortgage that is discharged or assigned by that single discharge or assignment.

Legal League 100 Leadership Convenes to Discuss Strategy Shift

On Wednesday, members of the Legal League 100Advisory Council met in Dallas, Texas, to discuss the state of the Legal League 100 and its subcommittees, and to create initiatives to reflect the concerns and needs of its membership.

A Five Star Institute professional association for law firms working in financial services, the strategy of the Legal League 100 has shifted along with changes in the default servicing industry,

At the Legal League 100 Spring Summit in April, Ed Delgado, Ex-Officio of the Legal League 100 and President and CEO of The Five Star Institute, told members of the Legal League 100 that the group’s focus going forward would be on advocacy as opposed to focusing on marketing.

“The abatement in defaults since the crisis has necessitated a shift in strategy for the Legal League 100,” Delgado said. “The primary objective of Legal League 100 is advocacy and on becoming a powerful voice for representations in decisions that affect the industry. Our focus will also be on helping default servicing law firms to be sustainable in today’s changing default servicing landscape.”

The meeting was led by Neil Sherman from Schneiderman & Sherman, P.C., who was elected Chairperson of the Legal League 100 Advisory Council in April, as well as Delgado.

Sherman spoke to the need for law firms to diversify their business strategies and explore cost containment strategies so as to remain competitive in a shifting marketplace. “We as an industry and a membership are at a crossroads. It is imperative through partnership and collaboration with the servicing community that we as attorneys aid in the development of solutions that support overall industry viability. In these challenging times in our industry it is our responsibility shine,” Sherman said.

“The abatement in defaults since the crisis has necessitated a shift in strategy for the Legal League 100.”

Ed Delgado, President and CEO, The Five Star Institute

Other leadership changes announced in April for the Advisory Council were the election of Michelle Garcia Gilbert of Gilbert Garcia Law Group, P.A., as Vice Chairperson; Roy Diaz of SHD Legal Group, P.A., and David G. Marowske of Potestivo & Associates, P.C., to general positions with the Advisory Council; and Stephen M. Hladik of Hladik, Onorato & Federman, LLP, as Government Affairs Subcommittee Chairperson. Re-elected to Advisory Council general positions in April were Jeffrey B. Fisher of BP Fisher Law Group; Erin M. Laurito of Laurito & Laurito, LLC; and Richard Nielson of Nielson & Sherry, PSC.

“I am excited in my role as Vice Chairperson to act as a liaison between Advisory Council and the Legal League Subcommittees to create initiatives to reflect the concerns of the membership as a whole,” Gilbert said. “Today’s meeting was an important first step to outlining these initiatives and putting thought into action.”

The newly-elected and re-elected members joined Advisory Council members Adam Codilis, Codilis and Associates, P.C., and J. Anthony Van Ness, Van Ness Law Firm, PLC.

At Wednesday’s meeting, the Advisory Council discussed initiatives for 2016 and 2017 to advocate on behalf of the Legal League 100 membership at large and address important issues such as law firm viability sustainability, dealing with cost increases, entering new business arenas, and the creation of uniform procedures throughout the industry.

The Legal League 100 Fall Summit will be September 13 as part of the 2016 Five Star Conference and Expo. The conference will be September 11 through 13 in Dallas, Texas.

 

Source: www.DSNews.com

Best Homes Title – In the News…

Legal League 100 Names New Advisory Council Chairman

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Neil R. Sherman

Neil R. Sherman, managing attorney at Detroit-based Schneiderman & Sherman PC, has been elected as chairman of the advisory council of the Legal League 100, a membership group comprised of default servicing law firms and service providers.

Sherman focuses his practice in the areas real estate law, and specifically bankruptcy, foreclosure ,and eviction processes. He is a member of the American Legal and Financial Network and is acting chair for Manufactured Housing Committee. He is also a member of the Mortgage Bankers Association, Michigan Mortgage Lender’s Association, and the State Bar of Michigan. He is also the president of Best Homes Title Agency and is  a licensed title agent and is a faculty member for Sterling Education Services.

Sherman, of Bloomfield Hills, earned his Bachelor of Arts in psychology at the University of Western Ontario and his juris doctor from the Michigan State University Detroit College of Law.

Neil Sherman Named New Advisory Council Chairman for Legal League 100

The Legal League 100 Announces New Advisory Council Chairman and Council Members

Dallas, Texas, April 21, 2016 –The Legal League 100, a membership group comprised of default servicing law firms and service providers, announced that Neil R. Sherman, managing attorney at Detroit-based Schneiderman & Sherman P.C., has been elected as Chairperson to the group’s Advisory Council. The announcement came at the close of the League’s successful Spring Servicer Summit, which was held April 14 in Dallas, Texas. He replaces Glen Rubin, managing partner at Rubin Lublin, LLC, who stepped down at the end of his term.

The Legal League 100 Advisory Council was introduced in December 2011 as a means to progress the reach of the Legal League 100 to a higher-level so legislative changes and servicer involvement is heightened. The Advisory Council is comprised of a Chairperson, Vice-Chairperson, and seven advisory council members, who are all members of the Legal League 100.

“The Advisory Council works diligently to promote the interests of the Legal League 100 throughout the industry,” said Ed Delgado, President and CEO of the Five Star Institute and Ex-Officio of the Legal League 100. “Neil is passionate, creative, and just the leading figure the Legal League 100 needs as law firms face today’s contracted market and landscape of heightened regulation. I am looking forward to seeing what new innovations Neil and the Advisory Council bring to the organization.”

Other leadership changes to the Advisory Council include Michelle Garcia Gilbert of Gilbert Garcia Group, P.A., being elected to the role of Vice Chairperson and Roy A. Diaz of SHD Legal Group, P.A., and David G. Marowske of Potestivo & Associates, P.C., being elected to Advisory Council general positions. Jeffrey B. Fisher of BP Fisher Law Group, Erin M. Laurito of Laurito & Laurito, LLC, and Richard Nielson of Nielson & Sherry, PSC, were all re-elected to Advisory Council general positions. The newly-elected and re-elected members will join current Advisory Council members Adam Codilis of Codilis and Associates, P.C., and J. Anthony Van Ness of Van Ness Law Firm, PLC.

In addition, the Legal League 100 announced that Stephen M. Hladik, Partner, Hladik, Onorato & Federman, LLP, was elected as the Government Affairs Subcommittee Chairperson.

About the Legal League 100
The Legal League 100, created in collaboration with the Five Star Institute, is a membership group for default servicing law firms and select service providers. The Legal League 100 acts as an advocate on behalf of its members to affect change in the industry from Wall Street to Washington, D.C. Made of up leaders in the default servicing industry, the Legal League 100 is committed to supporting the mortgage servicing industry through education, communication, and relationship development. It supports its multifaceted membership by serving as a leading force for industry standards, education, and market research.

About the Five Star Institute
The Five Star Institute (FSI) fosters education and collaboration within the mortgage banking industry and supports lenders, servicers, asset managers, service providers, agents, brokers, and other industry segments. Five Star Institute publications include DS News, a monthly-magazine and online resource dedicated to default servicing, and MReport, which serves the broader mortgage field. FSI also hosts the yearly Five Star Conference and Expo, the largest event in mortgage servicing. To learn more about Five Star membership groups and opportunities, visit TheFiveStar.com.

Best Homes Title Receives Fidelity Circle of Excellence Award

Congratulations to Best Homes Title Agency as a recipient of the 2015 Fidelity National Circle of Excellence award. We accept this award on behalf of our entire team throughout the State of Michigan. Thank you. Thank you.

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The Faces of Title Work – Best Homes Title Agency

FACES OF DETROIT 2015 SPECIAL SECTION

NEIL SHERMAN & PETER SCHNEIDERMAN – BEST HOMES TITLE AGENCY

23938 RESEARCH DR., STE. 100, FARMINGTON HILLS, MI 48335 | 248-286-3800 | WWW.BESTHOMESTITLE.COM

Best Homes Title Agency LLC is a full-service title company offering a wide range of residential and commercial title and escrow services. Established in 2006 with four title professionals, Best Homes Title, headquartered in Farmington Hills, has ballooned to 70 employees and 13 offices covering the entire State of Michigan.

We’re proud of our growth as we approach our first decade in business. It is our goal to be an industry leader in the title and settlement services sector, from the tip of the Upper Peninsula to the state’s southern borders, through the marriage of “old school” customer service and cutting-edge technology. Our team represents the very best of what our industry has to offer: experience, creativity, expedience, and simply the best customer service.

At Best Homes Title and its Commercial Division, BHT Commercial, we put our clients first while standing at the forefront of industry compliance. Best Homes regularly provides continuing education to the mortgage and realtor communities.

Along with our partner, Martindale Hubbell, AV-rated attorney, Peter Schneiderman, Neil Sherman has received a number of recent local and national honors. In 2014, he was named to DBusiness magazine’s “30 in their 30s,” as well as being recognized nationally by HousingWire magazine as a 2014 Real Estate Rising Star.

Best Homes Title Expands to Rochester Hills

For Release: June 1, 2015

Contact: Neil Sherman, 248-286-3800

BEST HOMES TITLE EXPANDS TO INCLUDE ROCHESTER HILLS AGENCY IN ITS MICHIGAN GROWTH STRATEGY

New acquisition drives firm’s focus on offering the best in terms of in-person access as well as the latest in technology

FARMINGTON HILLS, Mich. (June 1, 2015) – In its effort to become one of  Michigan’s largest and most experienced title- and escrow-services company, Best Homes Title announced today that it has grown with its acquisition of Rochester Hills-based Homeowners Title Agency.

This is the company’s largest Metro Detroit expansion, boosting Best Homes Title to 13 full-service offices across the state. Best Homes Title now has more than 75 employees, including an array of industry veterans in the areas of residential and commercial real estate.

The acquisition became official June 1, said Best Homes Title President Neil Sherman. Homeowners Title Agency owner Phil Campbell will be a key advisor, bringing his decades of experience to Best Homes Title and to his long-time clients during the transition, Sherman said. Eight Homeowners Title Agency employees will continue work from the Rochester Hills location.

Campbell, a real-estate attorney with more than 35 years of experience, founded Homeowners Title Agency in 2004 to provide client-centered real-estate transactions.

“In the past few years, we’ve added offices in Troy, Waterford, Big Rapids and Greenville. Now, we’ve got a presence in Rochester Hills. This not only increases our footprint, but it also increases our residential expertise,” Sherman said. “We will continue to look for new partnerships that are a match for our drive toward top-notch customer service and technical savvy.”

This Michigan-centric expansion is part of Best Homes Title’s desire to be an industry leader in the state, both in terms of the services it provides and the kind of technology it offers, Sherman said. Having 13 locations allows Best Homes Title to give its clients in-person access across the state to its team of real-estate attorneys, title and escrow experts and staff.

Its industry-leading technology also serves clients who want fast, reliable information to close a deal. That includes Best Homes Title’s Client on Demand service, giving brokers and Realtors online access to documents, as well as its new customer-friendly app.

“It’s quite unusual for a title agency to have an independent app,” Sherman said. “We think it’s a great thing for realtors and mortgage officers. It allows them to run estimates directly from their phones and send them to their customers. It’s complete interconnectivity and sets a new standard for the marketplace.”

Best Homes Title was founded in 2006 by real-estate attorneys Peter Schneiderman and Neil Sherman. Under their direction, Best Homes Title has grown from four people in Farmington Hills to more than 75 employees in 13 Michigan locations, averaging a monthly volume of more than 1,000 transactions.

The longtime business partners, who offered title services to their national clients, saw an opportunity to combine their industry experience and focus on customer service through the creation of Best Homes Title, an independent agent within the escrow and title industry. Best Homes Title is underwritten by First American Title Insurance Co., Fidelity Insurance Co. and Old Republic Insurance Co., providing expanded insurance solutions to its clients.

The two real-estate attorneys began working together at Schneiderman & Sherman P.C., a Michigan law firm serving the mortgage industry for more than 35 years. Mr. Schneiderman has continuously represented clients in the real estate and mortgage banking industry since 1975. Mr. Sherman, who serves as its Managing Attorney, joined the firm in 2002.

About Best Homes Title Agency LLC

Founded in 2006, Best Homes Title Agency, LLC, provides comprehensive title insurance, title examination and closing services throughout the state of Michigan. Best Homes Title is headquartered in Farmington Hills, Mich., with offices in 12 other locations, including Troy, Waterford, Saginaw and Grand Rapids. For more information, visit www.besthomestitle.com or call the main office at 248-286-3800.

4th Quarter Commercial Corner-The Recording and Perfecting of a Lost Mortgage by Affidavit

While the recording of Lost Document or Lost Mortgage Affidavits has been a long standing practice, when such an original document appears to have been lost between execution and the intended recording, Case Law and Bankruptcy Trustee challenges have left a lack of clarity as to the validity, enforceability and priority of such Affidavits.  But, after a great deal of hard work spearheaded by the Michigan Land Title Association, the Michigan Legislature recently (finally) passed a series of laws (Public Acts 347, 348 and 349 of 2014), resulting in revisions to MCL 565.201(6) and MCL 565.451a.

The statutes set forth requirements for the contents of such Affidavits which must be followed, including a statement by the affiant that “to the best of the affiant’s knowledge, the original mortgage was delivered from the mortgagor to the mortgagee.”  Additionally, the affiant must state that he/she either mailed a copy of the affidavit and unrecorded mortgage by first-class mail or registered mail, return receipt requested, to the mortgagor at their last known address, or personally served a copy of said documents on the mortgagor.

These statutes, designed to eliminate ambiguities and confusion regarding such recorded documents, are retroactive, and apply to mortgages already recorded in this manner.  This serves to codify common practices and should result in fewer title claims and more security for mortgage lenders.  Congratulations to the MLTA and all who were involved with this effort.

Estate Planning Variations and Deeds – One Popular Option, the Lady Bird Deed

Through the years people have sought economical ways of streamlining succession plans of owning real estate and avoiding the prospect of probate court upon the owner’s demise.  Often this resulted in a parent or parents deeding property to themselves and their heirs or desired successors, as joint tenants with rights of survivorship.  In many cases that achieved the desired goal, passing title to the designated survivor(s) and voiding the time and expense involved with probating an estate.

But such a practice was not without potential issues or problems.  What if: (1) the grantor changed his or her mind as to who should get (or share) the real estate after his or her death?  Of course, there could be numerous factors that might change the relationships or appropriate nature of the grantees.  Perhaps one of the heirs (grantees) moved across the country and thus had no need or interests in the real estate.  What if one of the heirs had been the principal care giver in recent years and was deserving of a greater share?  Or what if there was a falling out between the grantor and one of the heirs?  How could the grantor change his or her mind and undo what had been previously put in place?

With such “joint tenant” deeds, it would take the cooperation of all of the grantees to re-convey into the configuration now desired by the original grantor.  That might be simply undertaken.  But there is certainly no guarantee.  Equally problematic might be the scenario where the original grantor now wishes to take out a mortgage on the property or refinance.  Of course, that mortgage will need to be signed by ALL the title holders (even though they are not the “borrower”).  The same would apply should the grantor decide to the sell the property.  All this ties the original grantor’s hands, in exchange for avoiding probate.  Is there a better way?

Perhaps, yes.  A different estate planning tool, developed 40+ years ago by U.S. President Lyndon Johnson to transfer property to his wife “Lady Bird” Johnson, seems to have gained popularity in recent years.  Simply put, the grantor conveys his or her (or their) interest in the property, while at the same time retaining a life estate, coupled with the full power to convey, mortgage or otherwise alienate the property during the grantor’s lifetime.  If the grantor does not exercise this power during his or her lifetime, the grantee(s) (remaindermen) become vested in fee title without any further action or probate court process.

There are variations as to the language and style that can achieve this end result.  And, as always, estate planning and the drafting of such specifically worded deeds should only be done by a real estate attorney after the necessary counseling with the grantor/client.  But it is another estate planning tool.  This form of conveyance and reservation is supported by Michigan Land Title Standards 9.3 and 9.9, and Michigan Compiled Law 565.114.

Know Before You Owe

In our last issue we mentioned the Dodd Frank Act and the resulting Consumer Financial Protection Bureau (CFPB).  In the CFPB’s efforts to provide easier-to-use mortgage disclosure forms, improve consumer’s understanding  and ability to shop for mortgages, and to prevent surprises at the closing table, the CFPB has created its Know Before You Owe program, and will be combining the elements of the Real Estate Settlement Protection Act (RESPA) and the Truth-in-Lending Act (TILA) into a new Loan Estimate (replacing the GFE) and a Closing Disclosure, which will replace the HUD-1 in August, 2015.  The CFPB also created the Qualified Mortgage (QM) rules for lenders, which we discussed in our last issue, focused on the consumers’ ability-to-repay.

But, real estate investors and individual sellers, considering seller financing as part of their transaction, should know that the QM rules may also apply to them!  The CFPB has issued rules regarding seller financing, which includes carry-back mortgages and land contracts.  Investors and Realtors should be aware of these rules, as they may impact the sellers’ options and obligations.

Essentially, there are two different rules applying to seller financing, which may allow a seller to avoid being characterized as a “loan originator” under the CFPB regulations.  A lender/seller may qualify under the 3-Propety Exclusion (within a 12 month period) or the One-Property Exclusion (1 property in 12 months).  In the 3-Propety Exclusion, the seller financed mortgage (or land contract) must fully amortize (no balloon payment or negative amortization), have a fixed rate of interest or a rate that adjusts no sooner than 5 years, and the lender/seller must determine that the consumer/buyer has a reasonable ability to repay.  The lender/seller may be a natural person or an organization, but must be the owner of the property.  The lender/seller may not be a builder.

In the One-Property Exclusion, only natural persons, their estates or trusts may be the lender/seller (again, they must be the owner).  The repayment schedule may have a balloon payment, but may not have negative amortization.  There is no obligation relative to the buyer’s ability to repay.  It may be a fixed rate financing or adjustable rate with reasonable annual and lifetime limits on rate increases.  The National Association of Realtors issued a bulletin entitled Impact of Loan Originator Final Rule on Seller Financing, which includes more detail on this subject.  Seller (and Realtor) beware.