Zoning Endorsements Revised, New Forms Added
Effective April 12, 1999 the New Jersey Department of insurance has approved revisions of the currently filed ALTA 3 & 3.1 Forms in use in New Jersey. The major change in these forms occurs in Form 3.1 which now includes coverage for parking spaces. The other major change in these forms is that they are now worded in the negative. The Endorsements now insure against loss in the event that the property is not classified in a particular Zone. The rates for the issuance of either endorsement have not changed.
Also effective April 12, 1999 is a revised Alta 9 Endorsement along with two new endorsements, the Alta 9.1 and 9.2. The ALTA 9 ( Restrictions, Encroachments and Minerals Endorsement) is essentially unchanged but picks up the American Land Title Association language for the coverage previously provided by the NJ Restrictions, Encroachments and Minerals Endorsement now withdrawn. This continues to be issued for loan policies only, at a charge of $25.00.
The Alta 9.1 and 9.2 offer similar coverage for owners policies on unimproved and improved land respectively. These may be issued only on property that is other than a one - four family residence and neither may be issued without a survey endorsement. Both endorsements carry a charge of 10% of the applicable premium.
A new form of Subdivision Endorsement has also been approved, effective April 12, 1999. It modifies the Zoning / Land Use exclusion found in the current ALTA policies by providing the insured with coverage against loss by reason of the entry of a final and unappealable judgment or order by a court of competent jurisdiction setting aside or invalidating the estate or interest insured for failure to obtain final subdivision approval. This endorsement is authorized for both owners and loan policies on both residential and commercial properties. The cost of the endorsement is 5 % of the applicable underwriting charge.
If you have any questions on these or other available endorsements, please contact us.
Financial Services Modernization Bill Amended
On March 11, 1999 the House Banking Committee adopted an amendment to the Financial Services Modernization Bill ( H.R. 10 ) providing special treatment for title insurance. Initial drafts of the legislation permitted title insurance to be sold directly by a bank. In such cases, the sale of title insurance would be regulated not by the State Department of Banking and Insurance but by the regulator of national banks, the OCC.
Among the concerns recognized by the amendment was that banks, acting in their capacity as mortgage lenders are the insured in mortgage title insurance policies. Consequently, supervision by the OCC would create incentives and conflicts which could undermine the risk avoidance / risk spreading functions of title insurance.
"Tech Day 2000" Scheduled April 21st:
Stewart Title Services of North Jersey is sponsoring a breakfast seminar from 8:30 - 10:00 AM, Wednesday April 21, 1999 at the Ramada Inn, Route 10 West, East Hanover, NJ. The seminar will showcase a variety of new technologies that are available free to save you time and effort in the day to day processing of your real estate transactions.
Attendees will learn how to save time and speed up their transactions by placing title insurance orders directly over the internet at our web site www.titleesq.com. They will also learn to easily track successors to banks, research title questions, order flood searches and obtain forms of documents from across the country, all from their desktop computer.
As a bonus, the latest version of Stewart Title's Award winning "Virtual Underwriter Version 3.0" software as well as "FloodwavesII" software will be available free! You'll also get a sneak preview of "The Closing Wizard" available only at Stewart Title Services of North Jersey.
Join us as we continue the evolution into the single resource for all your closing transaction needs. Please be sure to stop by and let us show you how you will be doing business tomorrow and in the next century. Please RSVP to reserve your space by April 9, 1999 at (800) 734-6019.
Alternate Method of Mortgage Cancellation Approved
A new law, which provides for an alternate method to cancel mortgages of record was signed by Governor Whittman on March 12, 1999. The law is intended to assist homeowners, attorneys and title companies by providing a relatively simple and expeditious means of removing mortgages from the county records where the lender has failed to so in a timely fashion.
The Act permits an attorney -at-law or licensed title insurance producer who has caused a " residential mortgage" to be paid to secure its discharge by submitting an affidavit setting forth the steps taken to obtain the discharge from the lender. The affidavit must contain the following
- payment was made in accordance with a current written pay-off letter as defined in the Act.
- the affiant knows that the lender received the payment.
- a notice was sent to the lender by certified mail at least 30 days after payment was received, advising it of the affiant's intention to cause the mortgage to be discharged by affidavit.
- a second notice was sent to the lender at least 30 days after the first notice was received, and
- at least 15 days have elapsed since the lender received the second notice.
The affidavit is then attached to a discharge prepared by the affiant and recorded. Under the Act, a "residential mortgage" is defined as that in which a loan is secured by a lien on a one-to four family dwelling (including condominium unit) which is or was occupied by the mortgagor or a member of his or her immediate family, as a residence.
The Act also permits a mortgage servicer who receives a mortgage pay-off to execute a discharge, release, subordination or postponement on behalf of the actual owner of the mortgage, provided that the discharge contains the following recital:
"________ is authorized to execute this instrument pursuant to the terms of a written agreement dated _________ between ___________, a owner or holder of the mortgage and ______________, as servicer thereof."
Where a mortgage has been assigned but not all of the assignments have been properly recorded, this method of discharge may still be used but the discharge must recite all assignments, whether or not recorded.
This Act, which will be codified at N.J.S.A. 46:11.5 et seq., is scheduled to be effective on June 10, 1999, but it applies to all mortgages which meet to definition of "residential mortgage" in the statute, whenever made. The Act would appear to apply to mortgages made and recorded before the June 10, 1999 effective date.
It should be noted that no sections of the existing law concerning mortgage cancellations have been repealed. A Mortgagee is still responsible for the timely discharge of a mortgage after receiving payment and continues to be responsible for fines and attorney's fees if it fails to do so.
Lastly, N.J.S.A. 2A:51-1, et seq., providing for the discharge of a mortgage by court order, remains as an alternative means of having a mortgage discharged of record where the requirements of the Act cannot be met, and is not disturbed by the Act.
Sanctity of Contract
Alfred D. Santoro, Jr., Esq.
Elissa Buonarota, Esq.
Stewart Title Services of North Jersey, L.L.C.
272 Parsippany Road
Parsippany, NJ 07054
Phone: (973) 560-0636
Fax: (973) 560-0819
1 (800) 734-6019
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Jersey lawyers delivering quality title insurance and related
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