TX Underwriting References

Agency

Powers of Attorney

What we require:

1. A competent principal;

  a. 18+ years old
  b. Mentally competent
  c. If principal not competent but POA is durable, obtain letter from doctor that principal was competent at time POA signed

2. Authority granted in writing and currently effective, unless triggering event has occurred under a "springing POA".

  a. For POA's that are not durable, considered "stale" if more than 1 year old and new POA needs to be executed, if possible.
  b. If new POA is not possible, the agent's certification or an affidavit by the agent should be obtained which states that the principal is still 
  alive, competent, and has not revoked the POA. (Certification does not need to be recorded).

3. Express grant of powers. POA's are strictly construed by courts. For title/escrow purposes, the authority must specify power to grant, sell & convey, or mortgage real property. Whenever possible, require the POA identify the specific property and type of transaction;

   For statutory DPOA form (Texas Estates Code Chapters 751 and 752), it must include the power to act for principal in "real estate transactions" 
   and "banking and financing transactions" if principal is the borrower.

4. Not expired by its own terms;

5. Not revoked

  a. Principal must be alive
  b. No guardian has been appointed for principal
  c. Principal is not divorced from agent, or had marriage annulled

4. Original must be notarized and recorded within 30 days of the recording of the document signed by the attorney in fact; however, if the original cannot be obtained but was filed in another county, we will accept a certified copy of the recorded document.

IF BEING USED IN A HOME EQUITY TRANSACTION, WFG REQUIRES the Power of Attorney to be executed in the office of a title company, the lender making the HEL, or an attorney.

In order to insure title,

  a. the principal must be contacted 1) prior to closing, and 2) the day of closing, to confirm they are alive and aware of the fact the POA 
  will be used in the closing transaction.
  b. the lender must have approved (if lender's instructions require prior review and approval). Any approval should be documented and retained in     
  permanent file.

If a DPOA is not immediately accepted, the following items can be requested within the following deadlines:

  a. Agent's Certification within 10 business days after DPOA is presented;
  b. Opinion of Counsel within 10 business days after DPOA is presented;
  c. English translation (if applicable) within 5 business days after DPOA is presented

Upon receipt of either the Agent's Certification or the Opinion of Counsel, have 7 business days to accept If any of the above are requested but not provided, the DPOA doesn't have to be accepted for use

Texas Estates Code §751.206 provides a laundry list of permissible reasons for rejecting DPOA, and a written statement advising of reason(s) for rejection of DPOA must be provided on or before the date the acceptance is required. If DPOA is rejected, but no permissible reason is given, principal or agent has cause of action and court can order acceptance of DPOA and award attorney's fees and costs to plaintiff.

Alteration of Instruments

Texas Property Code Sections 5.027-5.031 authorize the use of correction instruments.

Section 5.027(a) provides that a correction instrument that complies with Section 5.028 or 5.029 may correct an ambiguity or error in a recorded original instrument of conveyance to transfer real property or an interest in real property, including an ambiguity or error that relates to the description of or extent of the interest conveyed.

Section 5.028 defines the types of errors considered to be nonmaterial clerical or inadvertent errors, and allows a person with personal knowledge (such as the settlement agent or the person who drafted the original document) of the facts relevant to the correction of a recorded instrument (provided the instrument itself discloses the basis of that person's personal knowledge) to execute said instrument.

            (a) Nonmaterial changes that are clerical include:
                  (1) a correction of an inaccurate or incorrect element in a legal description, such as a distance, angle, direction, bearing or 
                  chord, a reference to a plat or other plat information, a lot or block number, a unit, building designation, or section number, 
                  an appurtenant easement, a township name or number, a municipality, county, or state name, a range number or meridian, a 
                  certified survey map number, or a subdivision or condominium name;  or
                  (2) an addition, correction, or clarification of:
                    (A) a party's name, including the spelling of a name, a first or middle name or initial, a suffix, an alternate name by which a 
                     party is known, or a description of an entity as a corporation, company, or other type of organization; 
                    (B) a party's marital status; 
                    (C) the date on which the conveyance was executed;
                    (D) the recording data for an instrument referenced in the correction instrument;  or 
                    (E) a fact relating to the acknowledgment or authentication.

            (a-1), Nonmaterial changes that are inadvertent include:: 
                  (1) a legal description prepared in connection with the preparation of the original instrument but inadvertently omitted from the 
                   original instrument;
                  (2) an omitted call in a metes and bounds legal description in the original instrument that completes the description of the 
                   property

Once the nonmaterial correction is made, section 5.028(d) requires that, if the instrument is not signed by each party to the original recorded instrument, a copy of the correction instruments and notice must be sent by first class mail, e-mail, or other reasonable means to each party to the original instrument of conveyance and, if applicable, a party's heirs, successors or assigns.

Section 5.029 allows for a material correction to be made to an original recorded instrument of conveyance, so long as the correction is signed by all of the parties to the original transaction or the parties heirs, successors, or assigns, as applicable. Material corrections are defined as:

 (1) adding:
    (A) a buyer's disclaimer of an interest in the real property that is the subject of the original instrument of conveyance;
    (B) a mortgagee's consent or subordination to a recorded document executed by the mortgagee or an heir, successor, or assign of the mortgagee;       or
    (C) land to a conveyance that correctly conveys other land;

(2) removing land from a conveyance that correctly conveys other land;  or 
(3) accurately identify a lot or unit number or letter of property owned by the grantor that was inaccurately identified as another lot or unit 
number or letter of property owned by the grantor in the recorded original instrument of conveyance.

Section 5.027(b) prohibits a correction instrument under Property Code Chapter 51 power of sale, unless the conveyance otherwise complies with all requirements of Chapter 51 ((provisions relating to liens).

Under Section 5.030 (a) A correction instrument that complies with Section 5.028 or 5.029 is:

 (1)  effective as of the effective date of the recorded original instrument of conveyance;
 (2)  prima facie evidence of the facts stated in the correction instrument;
 (3)  presumed to be true;
 (4)  subject to rebuttal; and
 (5)  notice to a subsequent buyer of the facts stated in the correction instrument.

(b) A correction instrument replaces and is a substitute for the original instrument. Except as provided by Subsection (c), a bona fide purchaser of property that is subject to a correction instrument may rely on the instrument against any person making an adverse or inconsistent claim.

(c) A correction instrument is subject to the property interest of a creditor or a subsequent purchaser for valuable consideration without notice acquired on or after the date the original instrument was acknowledged, sworn to, or proved and filed for record as required by law and before the correction instrument has been acknowledged, sworn to, or proved and filed for record as required by law.

Texas Civil Practice & Remedies Code Section 121.006 allows for an acknowledgment form provided under Chapter 121 to be altered as circumstances require.

Bankruptcy

State Specific

TEXAS ALLOWS FOR A DEBTOR TO CLAIM STATE OR FEDERAL EXEMPTIONS

Texas Property Code § 41.001. INTERESTS IN LAND EXEMPT FROM SEIZURE. (a) A homestead and one or more lots used for a place of burial of the dead are exempt from seizure for the claims of creditors except for encumbrances properly fixed on homestead property.

(c) The homestead claimant's proceeds of a sale of a homestead are not subject to seizure for a creditor's claim for six months after the date of sale.

§ 41.002. DEFINITION OF HOMESTEAD. (a) If used for the purposes of an urban home or as both an urban home and a place to exercise a calling or business, the homestead of a family or a single, adult person, not otherwise entitled to a homestead, shall consist of not more than 10 acres of land which may be in one or more contiguous lots, together with any improvements thereon.

(b) If used for the purposes of a rural home, the homestead shall consist of:

    (1)  for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon;  or
    (2)  for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres, which may be in one or more parcels, with the 
     improvements thereon.

(c) A homestead is considered to be urban if, at the time the designation is made, the property is:

    (1)  located within the limits of a municipality or its extraterritorial jurisdiction or a platted subdivision;  and
    (2)  served by police protection, paid or volunteer fire protection, and at least three of the following services provided by a municipality or 
    under contract to a municipality:
     (A)  electric;
     (B)  natural gas;
     (C)  sewer;
     (D)  storm sewer;  and
     (E)  water.

(d) The definition of a homestead as provided in this section applies to all homesteads in this state whenever created.

§ 52.042. DISCHARGE AND CANCELLATION. (a) A judgment is discharged and any abstract of judgment or judgment lien is canceled and released without further action in any court and may not be enforced if:

    (1)  the lien is against real property owned by the debtor before a petition for debtor relief was filed under federal bankruptcy law;  and
    (2)  the debt or obligation evidenced by the judgment is discharged in the bankruptcy.

(b) A judgment evidencing a debt or obligation discharged in bankruptcy does not have force or validity and may not be a lien on real property acquired by the debtor after the petition for debtor relief was filed.

§ 52.043. EXCEPTIONS TO DISCHARGE AND CANCELLATION. A judgment lien is not affected by this subchapter and may be enforced if the lien is against real property owned by the debtor before a petition for debtor relief was filed under federal bankruptcy law and:

(1) the debt or obligation evidenced by the judgment is not discharged in bankruptcy; or (2) the property is not exempted in the bankruptcy and is abandoned during the bankruptcy.

Cemeteries

A cemetery includes a graveyard, burial park, mausoleum, or any other area containing one or more graves. TX Health & Safety Code Sec. 711.001(4)

(a) Except as provided by Subsections (b), (f), (g), (g-1), (g-2), (h), and (k), an individual, corporation, partnership, firm, trust, or association may not establish or operate a cemetery, or use any land for the interment of remains, located:

      (1)  in or within one mile of the boundaries of a municipality with a population of 5,000 to 25,000;
      (2)  in or within two miles of the boundaries of a municipality with a population of 25,000 to 50,000;
      (3)  in or within three miles of the boundaries of a municipality with a population of 50,000 to 100,000;
      (4)  in or within four miles of the boundaries of a municipality with a population of 100,000 to 200,000; or 
      (5)  in or within five miles of the boundaries of a municipality with a population of at least 200,000.

(b) Subsection (a) does not apply to:

      (1)  a cemetery heretofore established and operating;
      (2)  the establishment and use of a columbarium by an organized religious society or sect that is exempt from income taxation under Section 
       501(a), Internal Revenue Code of 1986, by being listed under Section 501(c)(3) of that code, as part of or attached to the principal church 
       building owned by the society or sect;
      (3)  the establishment and use of a columbarium by an organized religious society or sect that is exempt from income taxation under Section 
      501(a), Internal Revenue Code of 1986, by being listed under Section 501(c)(3) of that code, on land that: 
         (A)  is owned by the society or sect; and
         (B)  is part of the campus on which an existing principal church building is located;
       (4)  the establishment and use of a columbarium on the campus of a private or independent institution of higher education, as defined by 
       Section 61.003, Education Code, that is wholly or substantially controlled, managed, owned, or supported by or otherwise affiliated with an 
       organized religious society or sect that is exempt from income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed 
       under Section 501(c)(3) of that code, if a place of worship is located on the campus;
       (5)  the establishment and use of a mausoleum that is:
         (A)  constructed beneath the principal church building owned by an organized religious society or sect that:
           (i)  is exempt from income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed under Section 501(c)(3) of that 
           code; and 
           (ii)  has recognized religious traditions and practices of interring the remains of ordained clergy in or below the principal church 
           building; and 
         (B)  used only for the interment of the remains of ordained clergy of that organized religious society or sect; 
       (6)  the establishment and operation, if authorized in accordance with Subsection (h), of a perpetual care cemetery by an organized 
       religious society or sect that:
         (A)  is exempt from income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed under Section 501(c)(3) of that 
         code; 
         (B)  has been in existence for at least five years; 
         (C)  has at least $500,000 in assets; and 
         (D)  establishes and operates the cemetery on land that: 
           (i)  is owned by the society or sect; 
           (ii)  together with any other land owned by the society or sect and adjacent to the land on which the cemetery is located, is not less 
           than 10 acres; and 
           (iii)  is in a municipality with a population of at least one million that is located predominantly in a county that has a total area of 
           less than 1,000 square miles; 
      (7)  the establishment and use of a private family cemetery by an organization that is exempt from income taxation under Section 501(a), 
      Internal Revenue Code of 1986, by being listed under Section 501(c)(3) of that code, on land that is: 
        (A)  owned by the organization; and
        (B)  located in a county:
           (i)  with a population of more than 125,000; and 
           (ii)  that is adjacent to a county that has a population of more than 1.5 million and in which more than 75 percent of the population 
           lives in a single municipality; or 
      (8)  the establishment and use of a private family cemetery located at the site of a presidential library and museum.

(g-1) Not later than September 1, 2020, a nonprofit organization may file a written application with the governing body of a municipality to establish or use a cemetery located inside the boundaries of the municipality. The municipality by ordinance shall prescribe the information to be included in the application. The governing body by ordinance may authorize the establishment or use of a cemetery located inside the boundaries of the municipality if the municipality determines and states in the ordinance that the establishment or use of the cemetery does not adversely affect public health, safety, and welfare. This subsection applies only to a municipality that is wholly or partly located in a county with a population of more than 3.3 million.

(g-2) Not later than December 1, 2022, an individual, corporation, partnership, firm, trust, or association may file a written application with the governing body of a municipality to establish or use a cemetery located inside the legal boundaries of the municipality. The municipality by ordinance shall prescribe the information to be included in the application. The governing body by ordinance may authorize the establishment or use of the cemetery if the municipality determines and states in the ordinance that the establishment or use of the cemetery does not adversely affect public health, safety, and welfare. This subsection applies only to a municipality that has a population of:

      (1)  at least 55,000 and not more than 60,000 and that is located in two counties, each of which has a population of less than 132,000; or 
      (2)  at least 24,000 and not more than 26,000 and that is the county seat of a county that has a population of at least 130,000 and not more 
      than 135,000.

(h) The governing body of a municipality described by Subsection (b)(6)(D)(iii) may authorize the establishment and use in accordance with Subsection (b)(6) of a cemetery located inside the boundaries of the municipality if the municipality determines and states in the ordinance that the establishment or use of the cemetery does not adversely affect public health, safety, and welfare.

Community and Separate Real Property

TX Family Code Sec. 3.001 defines separate property (in relation to real property) as property consisting of one of the following:

  -Property owned or claimed by a spouse prior to marriage
  -Property acquired by a spouse during marriage by gift, devise, or descent

Burden of Proof to establish SP is clear and convincing evidence (TX Family Code Sec. 3.003(b))

There is a presumption of community property if there is property possessed by either spouse during or on dissolution of marriage (Sec. 3.003(a))

Courts

Lis Pendens

TX Property Code 12.007 (a) After the plaintiff's statement in an eminent domain proceeding is filed or during the pendency of an action involving title to real property, the establishment of an interest in real property, or the enforcement of an encumbrance against real property, a party to the action who is seeking affirmative relief may file for record with the county clerk of each county where a part of the property is located a notice that the action is pending.

(b) The party filing a lis pendens or the party's agent or attorney shall sign the lis pendens, which must state:

    (1) the style and number, if any, of the proceeding; 
    (2) the court in which the proceeding is pending;
    (3) the names of the parties; 
    (4) the kind of proceeding;  and 
    (5) a description of the property affected.

(c) The county clerk shall record the notice in a lis pendens record.  The clerk shall index the record in a direct and reverse index under the name of each party to the proceeding.

(d) Not later than the third day after the date a person files a notice for record under this section, the person must serve a copy of the notice on each party to the action who has an interest in the real property affected by the notice.

Deeds

TX Prop. Code Sec. 5.022(a) provides a sample form for a fee simple conveyance with a covenant of general warranty.

In order to be a valid deed, the parties must be named, the intent to convey must be clear from the wording, the property must be sufficiently described, the instrument signed by the grantor and the instrument must be delivered to the grantee. Having a date on the deed is unnecessary.

A court will look within the four corners of a deed to give meaning to all its parts. Deeds are construed to confer upon the grantee the greatest estate that the terms of the instrument will allow. Combest v. Mustang Minerals, L.L.C., 502 S.W.3d 173, at 180. Texas courts will construe and interpret deeds strictly and against the grantor. Combest, 502 S.W.3d at 180.

Under TX Prop. Code Sec. 5.023, anytime the words "grant" or "convey" are used in a deed (unless the deed provides otherwise) there are two implied covenants: 1) covenant of seisin* 2) covenant against encumbrances.

     *Under the recent holding of the Texas Supreme Court in Chicago Title Ins. Co. v. Cochran Investments, Inc., 602 S.W.3d 895 (Tex. 2020)  the limited warranty language in a Special Warranty Deed (namely, that the grantor is only liable for defects by, through, or under the grantor) also limits the implied covenant of seisin to claims of its breach by, through, or under the grantor.   

A "deed without warranty" is not common in other states, but is similar to a quitclaim deed in that the seller is not liable for title defects, but, unlike a quitclaim deed, operates as an actual conveyance. A deed without warranty uses effective conveyance language, but does not include an express warranty of title, and expressly disclaims implied warranties, including those that arise from common law and those implied statutorily, including Section 5.023 of the Texas Property Code.

A general warranty deed with vendor's lien is generally used unless the full amount of the purchase price is paid at the time the deed is delivered. The vendor's lien is retained by the grantor/seller against the property being sold to secure purchase payment. Most vendor's liens are expressly provided in warranty deed. In such a lien, the vendor retains "superior title" only for purposes of enforcing payment of the debt. The vendor may sue to foreclose his lien or in some circumstances rescind the contract and resume possession of the property or convey it to a third party. The vendor may also judicially recover title possession by trespass to try title.

Common law allows a vendor an implied vendor's lien until the vendee has paid all of the purchase money. An implied vendor's lien can be waived either by express agreement or by acceptance of other collateral or of liability on the note by a third party (guarantor or co-signer). A holder of an implied vendor's lien must seek judicial foreclosure; he may not simply rescind the transaction to recover the land.

Dissolution of Marriage

Texas Family Code Sec. 6.001. INSUPPORTABILITY. On the petition of either party to a marriage, the court may grant a divorce without regard to fault if the marriage has become insupportable because of discord or conflict of personalities that destroys the legitimate ends of the marital relationship and prevents any reasonable expectation of reconciliation. Family Code Secs 6.002-6.007 provide other reasons a divorce may be granted, such as cruelty, abandonment, etc.

Family Code Secs. 6.102-6.111 provide the various grounds for annulment.

Family Code Secs. 6.201 and 6.202 classify a marriage as void for consanguinity or if one of the parties is already married.

Family Code Sec. 6.301 grants jurisdiction if at the time the divorce petition is filed, either the petitioner or respondent is a domiciliary of Texas for the preceding six-month period; and (2) a resident of the county in which the suit is filed for the preceding 90-day period.

Family Code Sec. 6.302 also allows a spouse domiciled in another state or nation to file the divorce petition in Texas if the other spouse has been a domiciliary Texas for at least the last six months, so long as its filed in the county in which the domiciliary spouse resides at the time.

Jurisdiction is given to annul a marriage only if the parties were married in TX or if either party is domiciled in TX (Family Code Sec.6.306). Similarly, jurisdiction to declare a marriage void is given only if (1) the purported marriage was contracted in this state; or (2) either party is domiciled in this state. (Family Code Secs 6.307).

Family Code Sec. 6.402 states that a petition in a suit for dissolution of a marriage is sufficient without the necessity of specifying the underlying evidentiary facts if the petition alleges the grounds relied on substantially in the language of the statute

Identity of Persons

Texas Civil Practice & Remedies Code Section 121.005, for purposes of taking an acknowledgment, an officer may accept one of the following:

1) Oath of a credible witness 2) A current identification card or other document issued by the federal government or any state government that contains the photograph and signature of the acknowledging person 3) With respect to a deed or other instrument relating to a residential real estate transaction, a current passport issued by a foreign country

Mobile homes, Manufactured Homes And Commercial Coaches

"Texas Manufactured Housing Standards Act", Texas Occupations Code Title 7 Subtitle C Sections 1201.001-1201.611.

The Manufactured Housing Division (MHD) of the Texas Department of Housing and Community Affairs (TDHCA) administers the Texas Manufactured Housing Standards Act and acts as HUD’s state supervisory agent to administer certain aspects of the National Manufactured Housing Construction and Safety Standards Act of 1974. Texas Gov't Code Sections 2306.6001-2306.6023 and 10 Texas Administrative Code Sections 80.1-80.95

The Standards Act assigns additional responsibilities to TDHCA for:

  (1) Maintaining records of ownership, location, and real or personal property status;
  (2) Recording and releasing liens;
  (3) Conducting training and issuing licenses to persons in the manufactured housing industry;
  (4) Performing installation inspections;
  (5) Issuing state seals;
  (6) Investigating and resolving consumer complaints under the Standards Act;
  (7) Investigating and taking appropriate action against violators of the Texas Act; and
  (8) Administering the Consumer Claims Program.

Notary & Acknowledgments

TX Gov't Code §406.001-406.013 and Tex. Admin Code §87.1-87.71

Texas Civil Practices and Remedies Code – Section 121.001 –

(a) An acknowledgment or proof of a written instrument may be taken in this state by: 
         (1)  a clerk of a district court;
         (2)  a judge or clerk of a county court; 
         (3) a notary public; 
         (4)  a county tax assessor-collector or an employee of the county tax assessor-collector if the instrument is required or authorized to be 
         filed in the office of the county tax assessor-collector;  or
         (5)  an employee of a personal bond office if the acknowledgment or proof of a written instrument is required or authorized by Article 
          17.04, Code of Criminal Procedure.

(b) An acknowledgment or proof of a written instrument may be taken outside this state, but inside the United States or its territories, by: 
          (1)  a clerk of a court of record having a seal;
          (2)  a commissioner of deeds appointed under the laws of this state;  or
          (3) a notary public. 

(c) An acknowledgment or proof of a written instrument may be taken outside the United States or its territories by: 
          (1) a minister, commissioner, or charge d'affaires of the United States who is a resident of and is accredited in the country where the 
           acknowledgment or proof is taken; (
          (2) a consul-general, consul, vice-consul, commercial agent, vice-commercial agent, deputy consul, or consular agent of the United States 
          who is a resident of the country where the acknowledgment or proof is taken; or 
          (3) a notary public or any other official authorized to administer oaths in the jurisdiction where the acknowledgment or proof is taken. 
(d) A commissioned officer of the United States Armed Forces or of a United States Armed Forces Auxiliary may take an acknowledgment or proof of a written instrument of a member of the armed forces, a member of an armed forces auxiliary, or a member's spouse.   

Texas Civil Practice and Remedies Code – Section 121.005 (a) An officer may not take the acknowledgment of a written instrument unless the officer knows or has satisfactory evidence that the acknowledging person is the person who executed the instrument and is described in it. An officer may accept, as satisfactory evidence of the identity of an acknowledging person, only:

           (1) the oath of a credible witness personally known to the officer; 
           (2) a current identification card or other document issued by the federal government or any state government that contains the 
            photograph and signature of the acknowledging person; or 
           (3) with respect to a deed or other instrument relating to a residential real estate transaction, a current passport issued by a foreign 
           country. 

(b) Except in a short form certificate of acknowledgment authorized by Section 121.008, the officer must note in the certificate of acknowledgment that:

           (1) he personally knows the acknowledging person; or 
           (2) evidence of a witness or an identification card or other document was used to identify the acknowledging person.