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 10 years or to the last insured deed or developer's deed, whichever is longer.
• Plant or other search restrictions -- Not applicable.
• Additional Requirements for REO Searches -- Review the foreclosure.
• Foreclosure Checklist -- Judicial only. Non-judicial foreclosures exist, but are not insurable. Legislation is pending that imposes additional conditions on foreclosure of reverse mortgages. (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)? -- Lenders will require municipal/departmental searches to be attached to the title report. These searches are not insured and are provided For Information Only. The lender will typically request a Certificate of Occupancy, Street Report, Housing and Building, Fire, Environmental Control Board, and Emergency Repair Violations.
• Survey Requirements -- Survey is required to remove the standard exception from owner's policy and commercial loan policy. For residential loan policies covering 1-4 family property, coverage is afforded to the lender by language on the policy jacket.

UPL

Legislation is pending to require, for reverse mortgages, that both the lender and borrower be represented by an attorney at the time of the closing, and each such party shall have at least one attorney present to conduct the closing.

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

• Deeds do not need both the Witness signatory line and the Notary. It just needs to be witnessed by a notary.

Spousal Joinder Requirements/Homestead

• Non-titled spouse does not have to join in the mortgage.
• Judgment against one person in a valid tenancy by the entireties attaches to the property and must be cleared. If the debtor spouse (or joint tenant) is deceased and spouse (or co-tenant) has taken title, the judgment may be removed so long as the judgment was not against the surviving spouse.

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 by court order. Attaches to after-acquired property.
• Federal Tax Liens -- 10 years (+30 days); can be refiled
• State Tax Liens -- 10 years
• Estate Tax Lien -- NY Estate tax is 15 years. (Federal 10 years.)
• State Inheritance Tax Liens -- NY has no inheritance tax.
• Mechanics Liens -- 1 year, and can be extended for one additional year ((Paul to send ML info))
• Financing Statements -- 5 years +30 days
• Mortgages -- Statute of limitations to foreclose mortgage is 6 years. Ancient mortgage custom (not a statute) is to remove after 12 years after maturity of the loan which was less than $50,000.
• HOA and Condo Liens -- 6 years from date of recording the notice. 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 -- Not applicable
• Child Support Liens -- Not applicable
• Lis Pendens is valid for 3 years and renewable for another 3 years by court order. LP’s in a foreclosure action do not need court approval to renew.

Odd Stuff

• The "Supreme Court" is trial-level court of general jurisdiction. Highest court in the state 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.