MI Underwriting References

Condominiums, Homeowners’ Associations and Common Interest Developments

Foreclosure of Association Lien

Under MCL 559.208(1) an HOA lien has priority over all liens “except tax liens on the condominium unit in favor of any state or federal taxing authority and sums unpaid on a first mortgage of record.” A PMM is senior to the HOA lien so the 3rd party bidder will be vested but also takes subject to the PMM

Conveyances

QTA

WFG does not insure from quiet title actions brought against just the property address. We would consider a quiet title action when it is brought against a specific person who owns the property. The court cannot eliminate a parties interest in the property if they are not named in the lawsuit to do so.

Deeds

Absence of Tenancy - married parties

The basic rule is - if the deed shows A & B as husband and wife (or now with same sex marriage, married to each other, husband and husband, wife and wife, a married couple, etc.), they enjoy a unity of title, which includes survivorship. The normal threshold is that the deed must indicate the relationship. As you know, this one does not. However, I believe there is a title standard on this - if in fact the two grantees were married on the execution date of the deed, the tenancy by the entireties will automatically apply, once there is recorded evidence to support that. Usually that would be an affidavit (even a self-serving one) reciting the date of the marriage - being prior to the date of the deed, and affirming that they were still married - at the time of the spouse's death, as affirmed by the death certificate information. That is the wiggle room I mentioned above.

Corrective Measures - Ambiguities

STANDARD 23.2 AMBIGUOUS DESCRIPTION: DETERMINING INTENT OF PARTIES

STANDARD: IF A DESCRIPTION CONTAINS EITHER A PATENT OR A LATENT AMBIGUITY, THE AMBIGUITY IS RESOLVED BY DETERMINING THE ACTUAL INTENT OF THE PARTIES OR, IF NECESSARY, BY APPLYING SETTLED RULES OF CONSTRUCTION TO DETERMINE THE PROBABLE INTENT OF THE PARTIES

STANDARD 3.3 DEED PURPORTING TO CORRECT PREVIOUS DEED

Standard:

A GRANTOR WHO HAS CONVEYED REAL PROPERTY BY An effective, UNAMBIGUOUS INSTRUMENT CANNOT, BY EXECUTING A SUBSEQUENT INSTRUMENT, MAKE A SUBSTANTIAL CHANGE IN THE NAME OF THE GRANTEE, DECREASE THE area OF THE real property OR THE EXTENT OF THE ESTATE GRANTED, IMPOSE A CONDITION OR LIMITATION UPON THE INTEREST GRANTED, OR OTHERWISE DEROGATE FROM THE FIRST conveyance, EVEN THOUGH THE SUBSEQUENT INSTRUMENT PURPORTS TO CORRECT OR MODIFY THE FORMER.

Dower

THERE IS NO LONGER DOWER IN MI

Dissolution of Marriage

Judicial Divesture of Non-Cooperating Spouse

Final Decreee CAN Divest

552.401 Property owned by spouse; award to party contributing to acquisition, improvement, or accumulation thereof; effect of decree. Sec. 1. The circuit court of this state may include in any decree of divorce or of separate maintenance entered in the circuit court appropriate provisions awarding to a party all or a portion of the property, either real or personal, owned by his or her spouse, as appears to the court to be equitable under all the circumstances of the case, if it appears from the evidence in the case that the party contributed to the acquisition, improvement, or accumulation of the property. The decree, upon becoming final, shall have the same force and effect as a quitclaim deed of the real estate, if any, or a bill of sale of the personal property, if any, given by the party's spouse to the party.

Environmental Endorsement Statute

MI: MCL 324.11143(3); MCL 324.20138(2)(a), (4) and (6)

Homestead

FOR MORTGAGES - MORE JOINDER ISSUE

The non-owning spouse must join in a mortgage other than a purchase money mortgage. The non-owning spouse is not required to join in a purchase money mortgage.

Incompetents & Minors

MICHIGAN UNIFORM TRANSFERS TO MINORS ACT Act 433 of 1998

Deed to minor must contain language transferring to the custodian of the minor

554.534 Instrument; form. Sec. 14. An instrument in substantially the following form satisfies the requirements of section 13(2)(b) and 13(8): "TRANSFER UNDER THE MICHIGAN UNIFORM TRANSFERS TO MINORS ACT I, ____________________ (name of transferor or name and representative capacity, if a fiduciary) transfer to ____________________ (name of custodian), as custodian for ____________________ (name of minor) under the Michigan uniform transfers to minors act, the following: (insert a description of the custodial property sufficient to identify it). Dated: _______________ __________________________________________________ (Signature) ____________________ (name of custodian) acknowledges receipt of the property described above as custodian for the minor named above under the Michigan uniform transfers to minors act. Dated: _______________ _________________________________________" (Signature of Custodian) History: 1998, Act 433, Imd. Eff. Dec. 30, 1998.

Land Contracts

Tenancy by Entirety

Standard 12.4: a husband and wife who acquire a vendee’s interest in a land contract hold the interest as tenants by the entireties unless the land contract evidences a contrary intent.

Land Title Standards

Michigan Land Title Standards

Letters of Indemnity Between Title Companies, Reliance on Mutual Indemnification Agreement

Future Advance Mortgages not covered

Future Advance mortgages are not covered under the Mutual Indemnification so simply having the current owner’s policy is not enough to remove it. You would need to request a hard indemnity from the underwriter on the current owner’s policy.

Litigation Issues

Ex Parte Orders

I would not be comfortable insuring this one. The Judge’s order is an Ex Parte Order, becomes a temporary order and is subject to being rescinded should she show up and object. That’s not a good situation for us to insure the buyer when potentially the court could rescind the order in its entirety. Nothing says reversal like an Ex Parte Order where the affected party has no idea what’s going on and has been denied their 14th Amendment Due Process rights.

Marital Property

FOR MORTGAGES: The non-owning spouse must join in a mortgage other than a purchase money mortgage. The non-owning spouse is not required to join in a purchase money mortgage. A non-owning wife must sign on a deed to sell property to release her Dower interest, but a non-owning husband does not need to join in on a conveyance by the wife.

Marketable Record Title Act & Curative Acts

ELEMENTS OF MARKETABLE RECORD TITLE STANDARD: A PERSON HAS MARKETABLE RECORD TITLE TO AN INTEREST IN LAND IF: (A) THERE IS AN UNBROKEN CHAIN OF RECORD TITLE TO THAT INTEREST FOR AT LEAST 40 YEARS (AT LEAST 20 YEARS FOR MINERAL INTERESTS AS DEFINED IN MCL 565.101a); AND (B) THERE IS NO ONE IN HOSTILE POSSESSION OF THE LAND. Authorities: MCL 565.101, 565.101a and 565.103. Cook v Grand River Hydroelectric Power Co, 131 Mich App 821, 346 NW2d 881 (1984); Rush v Sterner, 143 Mich App 672, 373 NW2d 183 (1985); Strong v Detroit & Mackinac Ry Co, 167 Mich App 562, 423 NW2d 266 (1988). Comment: The required period of an unbroken chain of record title is 20 years with respect to a mineral interest, which is defined in MCL 565.101a as an interest in minerals (other than an interest in oil, gas, sand, gravel, limestone, clay, or marl) owned by a person other than the surface owner.

Mortgages & Deeds of Trust

JOINDER OF SPOUSE The non-owning spouse must join in a mortgage other than a purchase money mortgage. The non-owning spouse is not required to join in a purchase money mortgage. A non-owning wife must sign on a deed to sell property to release her Dower interest, but a non-owning husband does not need to join in on a conveyance by the wife.

Mutual Indemnification Agreement

Future Advance Mortgages

Future Advance mortgages are not covered under the Mutual Indemnification so simply having the current owner’s policy is not enough to remove it. You would need to request a hard indemnity from the underwriter on the current owner’s policy.

New Construction Underwriting

Pending Disbursement / Alta 32-33

There are NO pending disbursement endorsements filed in MI (for any underwriter). They were replace with the ALTA 32 and 33. Please change your commitment and update your code going forward. There is a huge difference in the coverage between a pending disbursement endorsement and the ALTA 32 and 33. I don’t want the lender confused as to what they are actually getting.

Notary & Acknowledgments

Prohibitions

• A Notary cannot certify or notarize that a record is an original or a true copy of another record. • A Notary cannot notarize his or her own signature or take their own deposition. (The safest course of action is to never have a notary act as a signing witness and notarize the same document because a notary cannot notarize their own signature. A notary may witness the signing of the document and notarize the same document as long as the notary public is not notarizing their own signature. This means that if the witness’s signatures are required to be notarized, the notary public will only be able to notarize the record owner’s signature and the other witness. Best practice in this type of case is to have two witnesses e.g. friends, co-workers, neighbors, etc. witness the document and only have a notary complete the document notarization. Another option is to enlist another notary to notarize the notaries (witness) signature as a notary public cannot notarize their own signature.)

Power of Attorney

Acceptance by Appointed Agent

In MI for a Durable Power of Attorney to be valid the attorney in fact would need to sign an acceptance of responsibilities.

Private Road Notice Required - Sale Voidable

560.261 Sale of land; written disclosures to buyer; voidability of sale.

Sec. 261. No person shall sell any lot in a recorded plat or any parcel of unplatted land in an unincorporated area if it abuts a street or road which has not been accepted as public unless the seller first informs the purchaser in writing on a separate instrument to be attached to the instrument conveying any interest in such lot or parcel of land of the fact that the street or road is private and is not required to be maintained by the board of county road commissioners. In addition, any contract or agreement of sale entered into in violation of this section shall be voidable at the option of the purchaser. History: 1967, Act 288, Eff. Jan. 1, 1968. Popular name: Plat Act Popular name: Subdivision Control Rendered

Probate & Estates

TITLE DERIVED THROUGH INTESTATE DECEDENT

STANDARD 7.1:

THE TITLE TO REAL PROPERTY OF AN INTESTATE DECEDENT’S TITLE IS VESTED AS OF THE TIME OF DEATH IN THE HEIRS AT LAW, SUBJECT TO:

(A) THE RIGHTS TO HOMESTEAD, EXEMPT PROPERTY AND FAMILY ALLOWANCES;

(B) THE WIDOW’S RIGHT TO ELECT DOWER;

(C) THE RIGHT AND DUTY OF THE PERSONAL REPRESENTATIVE TO POSSESS THE REAL PROPERTY AND TO RECEIVE THE INCOME FROM THE REAL PROPERTY;

(D) THE POSSIBILITY OF SALE FOR ANY PURPOSE PERMITTED BY THE ESTATES AND PROTECTED INDIVIDUALS CODE (EPIC);

(E) THE LIEN OF ANY FEDERAL OR MICHIGAN ESTATE TAX; AND

(F) ANY FEDERAL OR STATE TAX THAT IS REQUIRED TO BE PAID BEFORE THE ESTATE CAN BE CLOSED.

TITLE DERIVED THROUGH TESTATE DECEDENT

STANDARD 7.2: THE WILL OF A TESTATE DECEDENT, WHEN PROBATED, conveys the DECEDENT’S TITLE TO REAL PROPERTY AS OF THE TIME OF DEATH SUBJECT TO:

(A) THE RIGHT OF THE SURVIVING SPOUSE TO ELECT A STATUTORY SHARE;

(B) THE RIGHT TO HOMESTEAD, EXEMPT PROPERTY AND FAMILY ALLOWANCE;

(C) THE WIDOW’S RIGHT TO ELECT DOWER;

(D) THE RIGHT AND DUTY OF THE PERSONAL REPRESENTATIVE TO POSSESS THE REAL PROPERTY ANDTO RECEIVE THE INCOME FROM IT;

(E) THE POSSIBILITY OF SALE FOR ANY PURPOSE PERMITTED BY THE ESTATES AND PROTECTED INDIVIDUALS CODE (EPIC);

(F) THE LIEN OF ANY FEDERAL OR MICHIGAN ESTATE TAX; AND

(G) ANY FEDERAL OR STATE TAX THAT IS REQUIRED TOBE PAID BEFORE THE ESTATE CAN BE CLOSED.

DISTRIBUTION OF ESTATE REAL PROPERTY BY COURT ORDER

(NOTE: probate proceedings can be either independent or supervised.)

STANDARD 7.3: A COURT ORDER OF DISTRIBUTION of ESTATE REAL PROPERTY DETERMINES:

(A) THE PERSONS ENTITLED TO THE ESTATE AND THEIR PROPORTIONATE SHAREs of the estate, WHETHER BY THE LAW OF DESCENT, THE WILL, OR AN AGREEMENT; AND

(B) THAT THE ESTATE HAS BEEN FULLY ADMINISTERED SO THAT THE ESTATE REAL PROPERTY, TITLE TO WHICH VESTED AT THE DECEDENT’S DEATH IN HEIRS AT LAW OR THE DEVISEES, IS FREE OF THE DEBTS AND CHARGES TO WHICH IT WAS SUBJECT.

INSIGNIFICANT IRREGULARITIES IN SUPERVISED PROBATE SALE - NON JURISDICTIONAL

(NOTE: NOTICE IS KEY IN PROBATE PROCEEDING RELATED TO SALE - NOTICE IS THE JURISDICTIONAL ISSUE BUT SEE COMMENTS IN MI STARDARD)

STANDARD 7.4: NOTWITHSTANDING A NON-JURISDICTIONAL IRREGULARITY IN SUPERVISED PROBATE SALES PROCEEDINGS BEFORE APRIL 1, 2000, A CONVEYANCE OF AN INTEREST IN REAL PROPERTY BY A FIDUCIARY MAY NOT BE AVOIDED if:

(A) THE SALE WAS AUTHORIZED BY LAW;

(B) ANY REQUIRED BOND WAS GIVEN AND APPROVED;

(C) THE PRESCRIBED NOTICE OF THE SALE WAS GIVEN;

(D) THE SALE WAS CONFIRMED; AND

(E) THE REAL PROPERTY IS HELD BY ONE WHO PURCHASED IN GOOD FAITH.

DEED UNDER POWER OF SALE GRANTED TO TWO OR MORE PERSONAL REPRESENTATIVES

STANDARD 7.5: ALL QUALIFIED AND SURVIVING PERSONAL REPRESENTATIVES MUST EXECUTE A DEED PURSUANT TO A TESTAMENTARY POWER OF SALE UNLESS THE WILL AUTHORIZES LESS THAN ALL OF THEM TO CONVEY.

POWERS OF SUCCESSOR OR SURVIVING PERSONAL REPRESENTATIVES

STANDARD 7.6: A successor personal representative has the same powers and duties as the original personal representative to complete the administration and distribution of the estate, but the successor personal representative of a testate estate may not exercise a power expressly made personal to the personal representative named in the will.

Unless the will provides otherwise:

(A) each power exercisable by SURVIVING personal CO-representative(s) may be exercised by the remaining personal COrepresentative(s) after the appointment of one or more is terminated; AND (B) if ANY person nominated as personal CO-representative(S) is not appointed, thE REMAINING appointed PERSONAL COREPRESENTATIVE(S) may exercise all the powers incident to the office.

CONVEYANCE AND MORTGAGE OF ESTATE PROPERTY

CONVEYANCE OF MICHIGAN REAL PROPERTY BY FOREIGN FIDUCIARY NOT QUALIFIED IN MICHIGAN

(NOTE: NEED ANCILLIARY PROCEEDINGS)

Standard 7.12: A fiduciary appointed by a court in a foreign jurisdiction during the administration of an estate cannot convey marketable title to Michigan real property unless qualified as a fiduciary in Michigan.

TESTAMENTARY POWER TO SELL DOES NOT INCLUDE POWER TO MORTGAGE IN SUPERVISED PROBATE PROCEEDINGS COMMENCED BEFORE APRIL 1, 2000

STANDARD: A TESTAMENTARY POWER TO SELL REAL PROPERTY DOES NOT INCLUDE THE POWER TO MORTGAGE REAL PROPERTY IN SUPERVISED PROBATE PROCEEDINGS COMMENCED BEFORE APRIL 1, 2000.

CONVEYANCE OF REAL PROPERTY BY INDEPENDENT PERSONAL REPRESENTATIVE AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000

STANDARD: AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000, an independent personal representative may convey MARKETABLE TITLE TO real property to A GOOD FAITH PURCHASER FOR VALUE, if the LETTERS OF AUTHORITY do not restrict the power of the independent personal REPRESENTATIVE to make the conveyance.

CONVEYANCE OF REAL PROPERTY BY PERSONAL REPRESENTATIVE APPOINTED in INFORMAL APPOINTMENT PROCEEDINGS AFTER MARCH 31, 2000

STANDARD 7.16-2: AFTER MARCH 31, 2000, A personal representative acting in AN informal appointment proceeding may convey marketable title to real property TO A GOOD FAITH PURCHASER FOR VALUE, if LETTERS OF APPOINTMENT are IN EFFECT WHEN THE conveyance is MADE AND THE PURCHASER has NO ACTUAL KNOWLEDGE OF ANY RESTRICTION AGAINST THE Conveyance.

TESTAMENTARY POWER TO SELL DOES NOT INCLUDE POWER TO MORTGAGE IN SUPERVISED PROBATE PROCEEDINGS COMMENCED BEFORE APRIL 1, 2000

STANDARD 7.7: A TESTAMENTARY POWER TO SELL REAL PROPERTY DOES NOT INCLUDE THE POWER TO MORTGAGE REAL PROPERTY IN SUPERVISED PROBATE PROCEEDINGS COMMENCED BEFORE APRIL 1, 2000.

MORTGAGE OF REAL PROPERTY BY INDEPENDENT PERSONAL REPRESENTATIVE AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000

STANDARD 7.17: AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000, an independent personal REPRESENTATIVE may give a valid mortgage of real property to a good faith mortgagee for value, unless the letters of authority restrict the power to mortgage or the mortgagee has actual knowledge of limitations contained in a court order or the will,

MORTGAGE OF REAL PROPERTY BY PERSONAL REPRESENTATIVE APPOINTED IN FORMAL OR INFORMAL APPOINTMENT PROCEEDINGS AFTER MARCH 31, 2000

STANDARD 7.18: After march 31, 2000, a personal representative acting in formal or informal appointment proceedings may give a valid mortgage of real property to a good faith mortgagee for value, unless the letters of appointment restrict the power to mortgage or the mortgagee has actual knowledge of limitations contained in a court order or the will, if any.

CONVEYANCE OF MICHIGAN REAL PROPERTY BY FOREIGN FIDUCIARY QUALIFIED AS PERSONAL REPRESENTATIVE OF INTESTATE ESTATE IN MICHIGAN AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000

STANDARD 7.14-1: AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000, A FOREIGN FIDUCIARY APPOINTED ADMINISTRATOR OF AN INTESTATE ESTATE IN ANOTHER STATE MAY, more than 30 DAYS AFTER THE DEATH OF THE DECEDENT, QUALIFY AS A PERSONAL REPRESENTATIVE IN MICHIGAN, PROVIDED NO LOCAL ADMINISTRATION OR PETITION FOR LOCAL ADMINISTRATION IS PENDING IN MICHIGAN, AND may IN THAT CAPACITY CONVEY MARKETABLE TITLE TO MICHIGAN REAL PROPERTY.

CONVEYANCE OF MICHIGAN REAL PROPERTY BY DOMICILIARY FOREIGN PERSONAL REPRESENTATIVE qualified AS PERSONAL REPRESENTATIVE OF INTESTATE ESTATE IN MICHIGAN AFTER MARCH 31, 2000

Standard 7.13-2:

AFTER MARCH 31, 2000, A DOMICILIARY FOREIGN PERSONAL REPRESENTATIVE APPOINTED ADMINISTRA­TOR OF AN INTESTATE ESTATE IN ANOTHER STATE MAY qualify as a personal representative in Michigan, IF no local ADMINISTRATION or petition for local administration is pending in Michigan, AND may IN THAT CAPACITY CONVEY MARKETABLE TITLE TO MICHIGAN REAL PROPERTY.

CONVEYANCE OF MICHIGAN REAL PROPERTY BY DOMICILIARY FOREIGN PERSONAL REPRESENTATIVE QUALIFIED AS PERSONAL REPRESENTATIVE OF TESTATE ESTATE IN MICHIGAN AFTER MARCH 31, 2000

Standard 7.14-1 AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000, A FOREIGN FIDUCIARY APPOINTED PURSUANT TO A WILL ADMITTED TO PROBATE IN ANOTHER STATE MAY, more than 30 days after the death of the decedent, QUALIFY AS A PERSONAL REPRESENTATIVE IN MICHIGAN AND may IN THAT CAPACITY CONVEY MARKETABLE TITLE TO MICHIGAN REAL PROPERTY.

CONVEYANCE OF MICHIGAN REAL PROPERTY BY DOMICILIARY FOREIGN PERSONAL REP QUALIFIED AS PERSONAL REP OF TESTATE ESTATE IN MI AFTER MARCH 31, 2000

STANDARD 7.14: AFTER MARCH 31, 2000, A DOMICILIARY FOREIGN PERSONAL REPRESENTATIVE APPOINTED PURSUANT TO A WILL ADMITTED TO PROBATE IN ANOTHER STATE MAY QUALIFY AS A PERSONAL REPRESENTATIVE IN MICHIGAN, IF no local administration or petition for local administration is pending in Michigan, AND may IN THAT CAPACITY CONVEY MARKETABLE TITLE TO MICHIGAN REAL PROPERTY.

PURCHASE OF ESTATE PROPERTY BY FIDUCIARY

PURCHASE OF ESTATE REAL PROPERTY BY FIDUCIARY AFTER MARCH 31, 2000

STANDARD 7.11-2: THE TITLE ACQUIRED BY A FIDUCIARY PURCHASING ESTATE REAL PROPERTY IN AN INDIVIDUAL CAPACITY, DIRECTLY OR INDIRECTLY, AFTER MARCH 31, 2000 IS NOT MARKETABLE UNLESS:

(A) THE SALE IS MADE WITH EXPRESS COURT AUTHORITY AND AFTER NOTICE TO ALL INTERESTED PARTIES AND A HEARING; (B) THE WILL OR A CONTRACT ENTERED INTO BY the DECEDENT EXPRESSLY AUTHORIZED THE TRANSACTION; OR (C) ALL INTERESTED PARTIES CONSENT to the sale AFTER FAIR DISCLOSURE.

PURCHASE OF ESTATE REAL PROPERTY BY FIDUCIARY BEFORE JULY 1, 1979

STANDARD 7.10: THE TITLE ACQUIRED BY A FIDUCIARY PURCHASING ESTATE REAL PROPERTY IN AN INDIVIDUAL CAPACITY, DIRECTLY OR INDIRECTLY, BEFORE JULY 1, 1979 IS NOT MARKETABLE.

PURCHASE OF ESTATE REAL PROPERTY BY FIDUCIARY AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000

STANDARD 7.11-1: THE TITLE ACQUIRED BY A FIDUCIARY PURCHASING ESTATE REAL PROPERTY IN AN INDIVIDUAL CAPACITY, DIRECTLY OR INDIRECTLY, AFTER JUNE 30, 1979 AND BEFORE APRIL 1, 2000, IS NOT MARKETABLE UNLESS THE SALE WAS MADE WITH EXPRESS COURT AUTHORITY AND AFTER NOTICE TO ALL INTERESTED PARTIES AND A HEARING. IN INDEPENDENT PROBATE PROCEEDINGS FOR A DECEDENT’S ESTATE, TITLE is ALSO MARKETABLE IF THE WILL OR A CONTRACT ENTERED INTO BY the DECEDENT EXPRESSLY AUTHORIZED THE TRANSACTION OR ALL INTERESTED PARTIES CONSENTED AFTER FAIR DISCLOSURE.

LIMITATION ON EXERCISE OF TESTAMENTARY POWER OF SALE

STANDARD 7.8: A TESTAMENTARY POWER OF SALE, GIVEN FOR A SPECIFIC PURPOSE, MAY BE EXERCISED ONLY FOR THAT PURPOSE.

DOWER AS AFFECTING PROBATE SALES

STANDARD 7.9: TITLE TO REAL property OF A MARRIED MALE DECEDENT DOMICILED IN MICHIGAN AT THE TIME OF HIS DEATH IS SUBJECT TO THE DOWER INTEREST OF HIS WIDOW, UNLESS:

(A) DOWER HAS BEEN BARRED; (B) THE WIDOW HAS ELECTED NOT TO TAKE DOWER; OR (C) THE WIDOW HAS FAILED TO MAKE A TIMELY ELECTION AFTER PROPER NOTICE.

QTA

WFG does not insure from quiet title actions brought against just the property address. We would consider a quiet title action when it is brought against a specific person who owns the property. The court cannot eliminate a parties interest in the property if they are not named in the lawsuit to do so.

Restrictions And Reverters

Inapplicability of 30 year statutory terminable to church/public/education/charities

554.64 Exemptions to act. Sec. 4. This act does not apply: (a) To a lease for a term of years. (b) If the specified contingency must occur, if at all, within the period of the rule against perpetuities. (c) If the terminable interest is held for public, educational, religious or charitable purposes. (d) If the terminable interest is created in a conveyance from the United States of America, the state or any agency or political subdivision of either of them.

Example

WFG would not be willing to remove it based on those sections of the statutes. I pulled them up and there are things not covered by this act and one is where the terminable event is held for religious purposes. I have attached it for you if you need it for the attorney. Please see MCL 554.64 (c). I agree that it is weird that he wants it removed when there is a church on it now. Unless he has a potential purchaser who won’t be using it for a church.

Have a great day!

Thank you, From: Laurie Nelson [1] Sent: Wednesday, February 10, 2021 3:03 PM To: Kim OConnor <koconnor@wfgnationaltitle.com> Subject: restrictions for church purposes re: Cedar Grove Church

External Sender. Hello Kim,

We are being asked to check with our underwriter regarding a deed recorded in 1952 that imposes restrictions that the property to be used for church purposes, or otherwise reverts to 1st parties.

The attorney for the customer is asking if the restriction could be considered no longer in effect due to MCL554.62, MCL554.63 and MCL554.61. He believes that after 30 years it is a terminable interest or a condition that is not enforceable and wants to know if we can insure over it based on this.

Spousal Interests

Joinder Requirements

The non-owning spouse must join in a mortgage other than a purchase money mortgage. The non-owning spouse is not required to join in a purchase money mortgage. A non-owning wife must sign on a deed to sell property to release her Dower interest, but a non-owning husband does not need to join in on a conveyance by the wife.

Streets and Alleys

Abandonment & Vacation

add an exception for the vacated street/alley even though they had an exception for the Notice vacating them. Sometimes, the vacation ordinance will grant an easement to public utilities, sometimes not. It’s always a good idea to add:

Rights, if any, of public utilities installed in vacated ________________ Street and the vacated, unnamed alley prior to the vacation thereof together with the right to enter onto the Land for the purposes of maintaining, repairing and replacing said utilities.

In some states, adjoining landowners may have a statutory easement for ingress/egress if the vacation would land lock them though it’s rare that you’ll have that situation.

Taxation And Tax Titles

Process to Examine

Process for MI is to have the agent write out their procedures for examining the foreclosure: compliance with the foreclosure notice statutes, filing times, service of process under Civil Rule 4.___, compliance with any deed requirements, etc. and how they’re going to deal with problems. If they’ve got an internal process for identifying the issues and ensuring strict compliance with the foreclosure statutes and due process service requirements, we’ll let them insure tax foreclosures in MI that comply with their procedures. What we don’t want to do is end up having to underwrite each and every one on a case by case basis. We don’t have the staff to do that and we can’t make enough money on each deal to bother with it.

So, first, how do we know that every necessary T was crossed and I was dotted, when underwriting this tax title acquisition? We REQUIRE evidence of actual, signed-for receipt of (constitutional) notice, provided to ALL interested parties, for the final hearing prior to the foreclosure. This is seldom accomplished. Instead, the company hired by the county for doing the noticing typically issues a form indicating that the notices were “delivered”. That is not good enough without seeing evidence of it being signed for (return receipt) OR by an affidavit of personal service. This rule applies to a $1,000 sale or a $100,000 sale. (Needless to say, this is not business we chase and we are typically NOT willing to argue about this! We CAN choose not to insure.)

Post Proceeding Deed or QTA

In general, when a property is purchased on tax sale in Michigan via a Quit Claim deed from the county treasurer only the tax interest in the property is conveyed to the tax sale purchaser. The ownership interest in the property remains vested in the original owner.

We cannot insure a property purchased on tax sale unless the owner of the tax interest has also obtained the ownership interest, giving them fee simple title to the property.

In order for the owner of the tax interest to obtain that ownership interest (to our satisfaction to insure), we need one of two things:

1. Deed from the prior owner. 2. An Order Quieting Title to the tax sale purchaser with all parties properly noticed.

Owner Has Owner's Policy

IF the purchaser from the Land Bank happened to have received an Owner’s Policy from a reputable title source (the underwriter being a signor to the Michigan Indemnification Agreement), and there is not a considerable disparity between the liability amount of that policy compared to the new sale price (or mortgage amount, in the case of a refi), I might rely upon that. But, that is a long shot. In my experience, not many Ops issued, when the Detroit Land Bank sells a property. Hope that helps (better late than never?).

Tenancies

Tenancy By Entirety - Land Contracts

Standard 12.4: a husband and wife who acquire a vendee’s interest in a land contract hold the interest as tenants by the entireties unless the land contract evidences a contrary intent.

Trusts And Trustees

Certificate of Trust

UNDERWRITING BULLETIN MI 2019-01

A trustee may now furnish a certificate of trust under MCL 700.7913 (as amended by HB-5362), in affidavit form, required to contain the following:  The name of the trust, the date of the trust, and the date of each operative trust instrument.  The name and address of each current trustee.  The powers of the trustee relating to the purposes for which the certificate of trust is offered.  The revocability or irrevocability of the trust and the identity of any person holding the power to revoke the trust.  The authority of co-trustees to sign on behalf of the trust or otherwise authenticate on behalf of the trust and whether all or less than all co-trustees are required to exercise the trustee powers.  A statement that the trust has not been revoked, modified or amended in any manner that would cause the representations included in the certificate of trust to be incorrect. While not required by the statute, it is recommended as a best practice that the certificate of trust include the legal description of the affected real property. One other significant change is that the certificate of trust may now be signed or otherwise authenticated by the settlor, ANY TRUSTEE (including a successor trustee), or an attorney for the settlor or the trustee.

Recording the Cert

There is the need to place a copy of the Trust or the Trust Cert of record in instances of any deed conveyance or mortgage, but we can also consider anything already appearing in the chain of title;

Here’s the hard and fast on that:

If there is a Cert of Trust appearing in the chain of title that complies with the recent Trust requirements I provided you, and the Trustee has not changed, we would simply accept a general affidavit from the Trustee that nothing has changed;

If there is a Cert of Trust appearing in the chain of title that does not comply with the requirements, or the Trustee has changed, we would require a new one meeting said requirements.

Zoning

Michigan Land Title Standards