NC Underwriting Summary

Search/Exam

• Minimum Search Requirements -- No Statutory Requirements for min search. Custom based on Marketable Title Act ch. 47B – 30 years, 10 year NC judgment search and 20 year Federal judgment search.
• Plant or other search restrictions -- No Plant – Attorney must supervise/certify search and provide attorney opinion
• Additional Requirements for REO Searches -- N/A
• Foreclosure Checklist -- N/A
• Special Searches Required (Code, HOA, Utilities)? --
• Survey Requirements
  • Purchase –yes
  • Refinance – no

UPL

• UPL Hot Button Issues --
  • Extreme caution required for NC Transactions; WFG approved attorney is Douglas P. Matheson; closing with any other attorney requires written approval from Compliance.
  • It is inappropriate for a title company to charge search and exam fees collectable for itself.
• A North Carolina licensed attorney, who is not an employee or agent of the title company, must certify title to a title company before a title policy may be issued per North Carolina General Statute section 58-26.1. Title companies may be owned, operated by or employ attorneys, but the attorney may not certify title to the company.

• Drafting of legal documents, including deeds, mortgages, and other transaction documents must be prepared by a NC attorney. NCGS § 84-2.1.

• Non-attorneys may provide limited services in a real estate closing including witnessing of closing documents and receipt and disbursement of closing funds. NC revised opinion on Authorized Practice now requires the supervision of the closing by a NC attorney, approval of funds for disbursement and final certification of title.

Witness Requirements

No Witnesses Required for Deeds or Deeds of Trust. Execution and Acknowledgment.

Property Tax

Taxes are assessed on a calendar basis; assessment beginning on January 1, due and payable by September 1 and payable without interest through January 5 of the following year. County budgets are based on fiscal year July 1 to June 30 but tax rates are applied on calendar basis.

Mortgage/Transfer Tax

• No Mortgage Tax
• Transfer taxes are collected on deeds at rate of $2 per $1000 in consideration ($1/$500). Deeds must show the amount of tax due on the face of the instrument. No transfer tax on deeds of trust or mortgages.

• Three counties, Pasquotank, Perquimans, and Washington, are authorized to collect an additional $1 per $100 as a land transfer tax on certain transactions. Those tax authorities should be contacted for specifics.

Spousal Joinder Requirements/Homestead

• A non-titled spouse must join in any conveyance after the initial purchase money deed of trust. This includes the principal residence and any recreational or investment property. Under the Doctrine of Instantaneous Seisin, we can insure the purchase money transaction, that is the individual taking title and granting a deed of trust in the same transaction, without the spouse’s joinder. This is only good for the purchase money transaction; the dower right exists for each subsequent refinance or sale.

Who May Serve As Trustee On Deed Of Trust

• A deed of trust is customary in N.C. Power of Sale contained in the NC form deed of trust allows streamlined quasi-judicial foreclosure process.
• Mortgages are allowed but will require judicial foreclosure.
• Any person or entity (other than minor) may be the trustee. Failure to name a trustee is corrected by statute that allows substitution of trustee to correct missing trustee. NCGS § 45-10.
• It is customary to list the closing attorney as trustee. Most banks in NC have designated entities to serve as trustee.

Time Limitations

• US Judgment Liens -- 20 years, renewable for 20 years
• State Court Judgment Liens -- 10 years
• 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 -- 10 years
• Mechanics Liens -- 6 months
• Financing Statements -- 5 years, can be renewed for 5 year term
• Mortgages -- If maturity date or last payment date is specified in the recorded instrument, 15 years; If not stated 35 years. N.C.G.S.A. § 45-36.24
• HOA Liens --
• Condominium assessments --
• Child Support Liens --

Odd Stuff

• A NC attorney may serve as a satisfaction agent acting on behalf of the landowner, and upon notice to the secured creditor of the intention to satisfy the recorded mortgage. The notice must identify the satisfaction agent, identify the security instrument to be satisfied, including parties, grounds for satisfaction, and authority. The statute sets out the specifics in NCGS § 45‑36.14.
• Usury
  • NC has statutory limitations on interest on consumer loans, mortgages, HELOCS and high cost loans: NC General Statutes § 24 1.1A. et seq.
  • Interest rates are limited for loans to natural persons for personal, family or household purposes secured by manufactured homes or structures used as principal residence.
  • A high cost loan is limited to $300,000 or less or the conforming loan size established by Fannie Mae.
  • A loan made to a non-natural person, for $300,000 or more, obtained by a natural person for purpose other than personal, family or household purpose is exempt from application of usury regulations.