NY Underwriting Summary

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DRAFT ONLY

Search/Exam

• Minimum Search Requirements -- No Marketable Title Act. 60 years is the standard full search, and may vary by county but the minimum is 40 years. For refinances with loan policy only, it is acceptable to search to the last insured deed or developer's deed.
• Plant or other search restrictions --
• Additional Requirements for REO Searches -- Review the foreclosure.
• Foreclosure Checklist -- Judicial only. Non-judicial foreclosures exist, but are not insurable. (Cannot be divested in FC: Property taxes, assessments, water and sewer rents and sewer surcharges, emergency repair liens, pest control liens, relocation liens, and unsafe building lis pendens) ((Paul to send checklist and related materials))
• Special Searches Required (Code, HOA, Utilities)? -- the typical search (both purchase and refinance) should include the county clerk, Housing and Building, Fire, Environmental Control Board, and Emergency Repair. ((Lisa to confirm))
• Survey Requirements -- Survey is customarily required to remove exception from owner's policies and loan policies for land improved by other than 1-4 family dwellings.

UPL

• Disbursement of funds is regulated by the Banking Board (3 NYCCR 38.7(a)(7)), which prohibits disbursement through title companies, but waivers are available.
• Attorneys are customarily involved in "sit-down closings" in some counties, but it's not a requirement.
• There is no definition of the unauthorized practice of law. Some agents prepare documents and disburse.

Vesting

• Tenants in Common is presumed without other intent being shown.
• Joint Tenants with Right of Survivorship is recognized, provided joint tenancy language is present.
• Tenants by the Entireties is recognized and is presumed when title is taken by husband and wife, and four unities are present. Deed does not have to state that the grantees are husband and wife, nor must it state the tenancy.

Witness Requirements

• Out of state acknowledgments are accepted, provided they are accompanied by a Certificate of Conformity. (299-a) (CONFIRM WITH SECTION 309-B FORM TEMPLATE)
• Corporate seal is not required

Spousal Joinder Requirements/Homestead

• Non-titled spouse does not have to join in the mortgage.

Construction Liens

• Type 1. General contractor has 8 months (commercial; 4 months single family dwelling) after completion of work or last delivery of materials to file a lien, which is then valid for one year (can be extended.)
• Note, if Lien Law language is included in the mortgage and the Building Loan Agreement is filed prior to closing and funding, and no mechanic's lien is recorded, the mortgage will take priority.

Who May Serve As Trustee On Deed Of Trust

• NY is a mortgage state

Time Limitations

• US Judgment Liens -- 20 years, renewable for 20 years
• State Court Judgment Liens -- 10 years, can be renewed for up to 10 additional years. Attaches to after-acquired property.
• Federal Tax Liens -- 10 years (+30 days); can be refiled
• State Tax Liens -- 10 years
• Estate Tax Lien -- Federal 10 years
• State Inheritance Tax Liens -- Until paid. State Estate Tax may be disregarded in sale from TbE or JT to a BFP; and in a mortgage by surviving TbE or JT; and generally against surviving spouse as TbE; and upon sale or mortgage by heirs, devisees, or distributees of decedent.
• Mechanics Liens -- 1 year, and can be extended for one additional year
• Financing Statements -- 5 years +30 days
• Mortgages -- No statute of limitations. (Contracts SOL is 6 years.) Ancient mortgage to institutional lender under $50k, either with no maturity date or with maturity date over 12 years prior, may be disregarded provided the present owner was not mortgagor, and there was one or more transfers, and borrower affirms in affidavit that there has been no payment or demand for 12 years.
• HOA Liens -- 6 years from date of recording for condos. HOAs have no statutory basis, so apply contract law - 6 years. Foreclosure of first mortgages can divest HOA and COA liens, but second mortgages cannot.
• Condominium assessments --
• Child Support Liens --
• Notice of Pendency for Unsafe Buildings expire in 1 year from filing, if no final judgment entered that directs demolition of structure, and nothing of record for enforcement.

Odd Stuff

• Entity licensing began in 2014, which requires a sub-licensee with a financial or beneficial interest in the entity, and must hold a title.
• The "Supreme Court" is an appellate court. Highest court in the land is the Court of Appeals.
• Tax sale with recorded deed over ten years old is insurable without quiet title, unless the tax for that year was paid prior to the sale.
• CEMA is a mortgage agreement that consolidates, extends, and modifies prior mortgages, and is used to reduce mortgage tax. Documents should recite all previous mortgages, and if properly prepared, will act as a single mortgage after the consolidation. They are a bit expensive to prepare, so not all transactions will have a CEMA. Tax is charged on the new money only. Lien priority is as of the date of the new money, or most recent new money.
• NYC Code Violations and Building Department Liens are "in personam." If the city expends funds to repair the violation, then the liens will have a "super-priority" status over mortgage foreclosures.
• "Co-ops" are a popular form of ownership, and are considered personal property, not real property. Insuring is risky.
• Rates are set by TIRSA. WFG is a member of the Title Insurance Rate Service Association, Inc.
• CPLs are prohibited in NY.