VA Underwriting Summary - Revision history

Chadperrine: /* Foreclosure Review */

2015-12-15T19:24:07Z

‎Foreclosure Review

Chadperrine: /* Witness Requirements */

2015-12-15T19:23:39Z

‎Witness Requirements

Chadperrine: /* Vesting */

2015-12-15T19:23:13Z

‎Vesting

Chadperrine: /* Foreclosure Review */

2015-12-15T18:43:59Z

‎Foreclosure Review

Chadperrine: /* Foreclosure Review */

2015-12-15T18:43:34Z

‎Foreclosure Review

Chadperrine: /* Odd Stuff */

2015-12-15T18:38:31Z

‎Odd Stuff

Chadperrine: /* Time Limitations */

2015-12-15T18:37:06Z

‎Time Limitations

Chadperrine: /* Time Limitations */

2015-12-15T18:36:29Z

‎Time Limitations

Chadperrine: /* Who May Serve As Trustee On Deed Of Trust */

2015-12-15T18:35:25Z

‎Who May Serve As Trustee On Deed Of Trust

Chadperrine: /* Instrument Requirements */

2015-12-15T18:34:35Z

‎Instrument Requirements

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 ==Foreclosure Review==
 '''
 '''Estates''''''
 Selling real estate after the death of the owner depends on a host of considerations.  Alternatives depend upon the circumstance of each estate.

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 ==Witness Requirements==
-Acknowledgment only (required fro recordation); witnesses are not required on any deed or security instrument. See "Acknowledgments" under "odd Stuff" below.
+Acknowledgment only (required for recordation); witnesses are not required on any deed or security instrument. See "Acknowledgments" under "odd Stuff" below.
 ==Mortgage/Transfer Tax==

@@ Line 17: / Line 17: @@
 Common forms of ownership:
-Joint Tenants (with or without survivorship): If desired, survivorship must be explicitly stated in the Deed creating the interest.
+Tenants by the Entirety: limited to husband and wife; this form of ownership must be specifically identified.  T by E ownership is severed by death or divorce.  Upon death, the title passes automatically to the survivor as a matter of law and not to the heirs or devisees of the deceased.  Neither husband or wife may convey without the joinder of the other.
-Tenants in Common:
+Joint Tenants with Right of Survivorship: Note that survivorship must be explicitly stated in the Deed creating the interest.  In the event of death by one owner, title automatically passes by operation of law to the survivor(s).
 ==Witness Requirements==

@@ Line 77: / Line 77: @@
 '''
-Estates'''
+'''Estates''''''
 Selling real estate after the death of the owner depends on a host of considerations.  Alternatives depend upon the circumstance of each estate.

← Older revision		Revision as of 18:43, 15 December 2015
Line 75:		Line 75:

	==Foreclosure Review==		==Foreclosure Review==
		+
		+	'''
		+	Estates'''
		+	Selling real estate after the death of the owner depends on a host of considerations. Alternatives depend upon the circumstance of each estate.
		+
		+	Intestate Death
		+
		+	If the decedent died without a will, the death is characterized as “intestate” (without a will). Upon death without a will, title to the decedent’s real property passes automatically to the decedent’s heirs at law. Typically you will find a List of Heirs filed with the Clerk, purporting to identify the heirs of the deceased.
		+
		+	Do not rely blindly on such an affidavit. Although such affidavits may contain accurate information, usually the List of Heir affidavits are filed by self-interested parties and purport to assert legal conclusions (the identity of legal heirs which requires a thorough understanding of the state intestacy laws as well as facts involving family members of the deceased) beyond the competency of the individual signing the affidavit. Check with State Underwriting Counsel. Except when used to vest title in the purported heirs, affidavits unchallenged after one year may be considered more reliable.
		+
		+	Look for or require affidavits from disinterested parties who are familiar with the family of the deceased. A solid affidavit should clearly explain how the affiant knows the family members. Once the surviving family members are identified, look to the Virginia Intestacy Statutes to determine the legal heirs. Do not rely on family members to reach such conclusions. If you need help, seek assistance from State Underwriting Counsel.
		+
		+	The Administrator of an intestate estate does not have the power to sell real estate. The Administrator does have the power to sell and dispose of personal property. Under some circumstances, the Administrator may petition the Court for power to sell the real estate provided such an action is necessary. This may occur when real estate needs to be sold to satisfy all of the debts of the deceased.
		+
		+	Since the heirs own the real estate when the deceased dies intestate, all of the heirs must join in order to convey the property. In addition to the deed, joinder would include the real estate contract and other documentation customarily executed by sellers. Note that certain practical issues arise if the heirs are numerous, include minors or live in other states or countries.
		+
		+	Testate Death
		+
		+	If the deceased died with a will, the death is characterized as “testate” (with a will). In situations where the deceased died testate, once the will is probated, title vests in the devisees (or beneficiaries) under the will (assuming the will identifies devisees for the real property) subject to being divested by any power of sale given the Executor. Note that judgments against the devisees will attach to the property even if the Executor sells.
		+
		+	If the will “directs” the Executor to sell, title is vested in the Executor and the devisees need not join in any conveyance by the Executor. Note that judgments against devisees to not attach under these circumstances.
		+
		+	A will that gives a power of sale to the Executor without directing the Executor to sell creates other issues to be considered. Some Virginia case law suggests a mere power of sale given the Executor does not give the Executor the right to sell absent some necessity to take that action. An example of necessity would be a situation where the personal property is insufficient to pay all of the debts of the estate (and the costs of administration).
		+
		+	Where the will clearly devises the real property to named beneficiaries and contains a power of sale, you can sidestep potential difficulties by requiring both the Executor and the devisees/beneficiaries to execute any conveyance documents.
		+
		+	In Virginia, death raises a number of additional issues that must be addressed. These include but are not limited to creditors of the deceased, taxes, challenges to the will, locating a new will. ***
		+
		+	By statute, Virginia provides a safe harbor to bona fide purchaser who purchases more than one year after the death occurs (citation***)
		+
		+	For transactions within one year of death, several options are available. Sales proceeds can be escrowed until the year period passes. The seller or borrower can obtain a Decedent’s Debt Bond. Some title companies will waive these options and charge an extra hazard premium if they deem the risk appropriate. Although not done routinely, WFG has charged an extra hazard premium under some circumstances.
		+
	==Instrument Requirements==		==Instrument Requirements==

← Older revision		Revision as of 18:38, 15 December 2015
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	==Odd Stuff==		==Odd Stuff==
		+
		+	1. Acknowledgements: See generally, Virginia Code Sections 55-113 to 55-121. Virginia adopted the Uniform Recognition of Acknowledgements Act.
		+
		+	2. After Acquired Property: In certain circumstances, Virginia recognizes the “after-acquired” property doctrine. These situations arise when a property owner is subsequently obtains property that the owner previously conveyed. See Virginia Code Section 55-52. Contact your State Underwriting Counsel when facts may give rise to this issue.
		+
		+	3. Credit Line Deeds of Trust: Virginia recognizes a “Credit Line Deed of Trust” which gives certain priority to future advances provided the Credit Line Deed of Trust contains certain statutory language including “THIS IS A CREDIT LINE DEED OF TRUST” on the front page in capital letters or underscored. See Virginia Code Section 55-58.2.
		+
		+	4. Deed Warranties: General Warranty deeds on residential transactions are customary and expected. Large corporations frequently convey using special warranty deeds. Likewise Trustees conveying property as a result of a foreclosure sale convey by special warranty deeds. Quitclaim deeds are frowned upon and rarely used except to cure a possible outstanding title issue. Do not insure titles based on quitclaim deed without written authorization from State Underwriting Counsel.
		+
		+	5. “Gap” issues: Virginia does not permit the disbursement of funds prior to recordation on residential transactions. Very limited exceptions exist. Any lender providing transaction specific written instructions to a Settlement Agent to disburse prior to recordation assumes the risk of any “Gap” issues. See generally Virginia Code Section 55-525.11 stating both the Settlement Agent duty to record prior to disbursement and the few exceptions. See Virginia Code Section 55-525.15 for the penalty for failure to disburse as required by statute.
		+
		+	6. Judgments: The enforcement period is 20 years. (See Code Section 8.01-251) Names of buyers, borrowers and parties in the chain of title must be run for judgments.
		+
		+	7. ML issue: In the event of non-payment, contractors and suppliers of labor and materials have the right to file a mechanics’ lien (ML) against the property their work or materials improved. Any such ML must be filed no later than 90 days from the last day of the month in which the labor or materials were provided, and in no event more than 90 days from the completion of the structure. As a result, a ML claimant may have as much as 120 days to file a ML. (Notice how this could drastically affect any sale or refinance transaction, not to mention a title agent if this type of issue is not handled appropriately.)
		+
		+	The ML may include sums for labor or materials as much as 150 days prior to the last day in which labor or materials were provided.
		+
		+	The ML claimant has six months to file suit to enforce the ML. Upon the completion of a successful ML suit, the improved property is sold to satisfy the ML claims. Other lien holders, including previously recorded Deeds of Trust, receive any remaining sales proceeds.
		+
		+	As a result of the priority given ML claims in Virginia, both purchasers of newly constructed homes and their lenders as well a construction lenders, are at great risk in the event builders fail to pay all sub-contractors and suppliers.
		+
		+	Given this clear danger, all agents must approach transactions involving new construction with a great deal of caution. Seek assistance from State Underwriting Counsel. Also see “Construction Liens” above.
		+
		+	8. MLA: A subset of the ML issues mentioned above, a Mechanic’s Lien Agent (MLA) can be identified on a building permit posted on a residential construction project (one or two family dwellings only). If designated, any party desiring to retain ML rights must provide written notice to the MLA within 30 days of supplying labor or materials in order to preserve ML rights. In turn, the MLA can provide reports identifying the parties who provided notice to the MLA. In appropriate circumstances, use of a MLA can allow newly constructed residential dwellings to be easily sold based on a combination of reports from the MLA and lien waivers. See specific guidance from your State Underwriting Counsel for details. In addition, be familiar with the ML issues raised above as well as material under the Heading “Construction Liens.”
		+
		+	9. Notice of the Availability of Title Insurance: Before disbursement, the Settlement Agent must obtain from the purchaser a statement in writing that the purchaser has been notified by the Settlement Agent that the purchaser may wish to obtain owner’s title insurance coverage including affirmative mechanic’s lien coverage, if available, and of the general nature of such coverage, and that the purchaser does or does not desire such coverage. See Virginia Code Sections 38.2-4616 and 55-525.11 (Duty of Settlement Agent).
		+
		+	10. Refinance Subordination: Under certain circumstances a residential refinance deed of trust will have priority over previously recorded deeds of trust or mortgages without the need to obtain a subordination agreement. See Virginia Code Section 55-58.3. The original balance of the previously recorded deed of trust cannot exceed $150,000.00 nor encumber more than one dwelling unit. The principal amount of the new residential refinance deed of trust may not exceed the outstanding principal balance of the prior mortgage being refinanced nor exceed the previous interest rate. In addition the new refinance deed of trust must contain certain statutory language on the first page in bold or capitalized letters. See Virginia Code Section 55-58.3 for additional details.
		+
		+	11. Tax Sales: No agent may issue a title policy insuring the purchaser at a tax sale. Any title based on a tax sale in the chain of title must receive written permission from State Underwriting Counsel.
		+
		+	12. HOA liens – unlike Maryland or DC, Virginia does not give super priority to HOA liens.

@@ Line 90: / Line 90: @@
 •	US Judgment Liens -- 20 years.  See 28 U.S.C Section 3201.
 •	State Court Judgment Liens -- 20 years, can be renewed for another 20 years. See Virginia Code Section 8.01-251.  See also Virginia Code Section 8.01-458.
 •	Federal Tax Liens -- 10 years (+ 30 days)
 •	State Tax Liens -- 20 years.  See Virginia Code Section 58.1-1802.1 (which refers to judgment period).
 •	Estate Tax Lien -- 10 years
 •	State Inheritance Tax Liens --
 •	Mechanics Liens -- 6 months to file suit to enforce the ML; this can be extended under certain circumstances.  See Virginia Code Section 43-17.  See “Odd Stuff” below for more details.
 •	Financing Statements -- 5 years. Can be extended for five year periods.  See Virginia Code Section 8.9A-501 & Virginia Code Section 8.9A-515.
 •	Mortgages/ Deeds of Trust – 10 years from maturity date (with additional one year in the event of death of any party in interest).  See Virginia Code Section 8.01-241.  If no maturity date is stated (or can be calculated from the information in the recorded instrument), 20 years from the date of the Deed of Trust (although this can be extended by Certificate).  The limitation for a Credit Line Deed of Trust without a maturity date is 40 years from the date of the Credit Line Deed of Trust.  See Virginia Code Section 8.01-242.
 •	HOA Liens -- 3 years (2 years prior to 2005).  See Virginia Code Section 455-516. The three year period runs from the filing of the lien based on a statute requiring a suit to enforce the lien be filed within the three year period.  A minority view is that the lien remains in place despite the failure to file suit within the statutory 36 month period.
 •	Condominium assessments – A suit to enforce the lien must be filed within 36 months from recordation of the memorandum of lien. See Virginia Code Section 55-79.84.
 •	Child Support Liens – Expire when support obligation is paid in full.  See Virginia Code Section 8.01-460.
 ==Odd Stuff==

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 ==Time Limitations==
-*US Judgment Liens -- 20 years
-*State Court Judgment Liens -- 20 years
-*Federal Tax Liens -- 10 years (+ 30 days)
+•	US Judgment Liens -- 20 years.  See 28 U.S.C Section 3201.
-*State Tax Liens -- 20 years
+•	State Court Judgment Liens -- 20 years, can be renewed for another 20 years. See Virginia Code Section 8.01-251.  See also Virginia Code Section 8.01-458.
-*Estate Tax Lien -- 10 years
+•	Federal Tax Liens -- 10 years (+ 30 days)
-*State Inheritance Tax Liens --
+•	State Tax Liens -- 20 years.  See Virginia Code Section 58.1-1802.1 (which refers to judgment period).
-*Mechanics Liens -- 6 months
+•	Estate Tax Lien -- 10 years
-*Financing Statements -- 5 years
+•	State Inheritance Tax Liens --
-*Mortgages --
+•	Mechanics Liens -- 6 months to file suit to enforce the ML; this can be extended under certain circumstances.  See Virginia Code Section 43-17.  See “Odd Stuff” below for more details.
-*HOA Liens -- 3 years (2 years prior to 2005)
+•	Financing Statements -- 5 years. Can be extended for five year periods.  See Virginia Code Section 8.9A-501 & Virginia Code Section 8.9A-515.
-*Condominium assessments --
+•	Mortgages/ Deeds of Trust – 10 years from maturity date (with additional one year in the event of death of any party in interest).  See Virginia Code Section 8.01-241.  If no maturity date is stated (or can be calculated from the information in the recorded instrument), 20 years from the date of the Deed of Trust (although this can be extended by Certificate).  The limitation for a Credit Line Deed of Trust without a maturity date is 40 years from the date of the Credit Line Deed of Trust.  See Virginia Code Section 8.01-242.
-*Child Support Liens --
+•	HOA Liens -- 3 years (2 years prior to 2005).  See Virginia Code Section 455-516. The three year period runs from the filing of the lien based on a statute requiring a suit to enforce the lien be filed within the three year period.  A minority view is that the lien remains in place despite the failure to file suit within the statutory 36 month period.
 ==Odd Stuff==

@@ Line 80: / Line 80: @@
 ==Who May Serve As Trustee On Deed Of Trust==
-*Deeds of Trust are prevailing security instrument, although Mortgages are acceptable.
-*Trustees must be residents of the state.  If corporation is to serve as trustee, VA must be principal place of business.
 ==Time Limitations==
 *US Judgment Liens -- 20 years