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| July/August 2010 | Volume 3 • Number 7
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| Update from ATG President and CEO
ATG Advocates for You and Your Clients
1) ATG Asks HUD to Address Realtor®-Controlled Business Misconduct | The business practices of some real estate brokers continue to be an area of concern to ATG and its members.
While we welcome competition, we see with increasing frequency business practices that are unfair to consumers and that pose a very real threat to the ability of attorneys to represent their clients.
This is particularly true with the continued proliferation of "captive" title companies, those companies owned by real estate brokers, which use the threat of blacklisting lawyers on the condition that the lawyer use the broker's captive title company.
I previously opined on this topic in the December 2009 issue of the Trusted Adviser with the article, "ISBA Opinion 10-02: The End of Marginalization is the Pathway to Emancipation" and the April 2010 issue of the Illinois Bar Journal article, "ISBA Opinion 10-02 Reins in Real Estate Brokers." ISBA Opinion 10-02 is clear that a Faustian bargain whereby a lawyer agrees to steer clients to a captive in exchange for the client referral violates the code.
But this opinion does not directly address the practices of real estate brokers.
In the public comment we submitted August 4, 2010, to the Department of Housing and Urban Development (HUD), we asked that HUD prohibit this conduct by rule.
This is just one of several other strategies we have in place to tackle this very real problem.
2) Clarifying Existing Law: Competition for Foreclosure Auction Sales Good for Homeowners, Communities | House Bill 5055 was introduced in June 2010 with the primary purpose of clarifying existing law that the plaintiff (banks or mortgage lenders) in a foreclosure action is allowed to select who conducts the foreclosure sale --- the official (such as a sheriff) or a third party (such as a private seller). The bill was vetoed August 18 after county sheriffs and county board members contacted the governor's office complaining about the revenue impact it would have on local county budgets.
In our letter to Governor Quinn August 4, 2010, we emphasized that the issue of greatest importance with the bill isn't sheriff revenue. Instead, it's about processing the mass quantity of foreclosed homes in a responsible, efficient, and cost-effective manner. Doing so helps to ensure foreclosed properties that are already subject to a judgment order clear the system and don't unnecessarily wait for months to be auctioned. When homes are in limbo, they can become vacant and blight the surrounding communities.
This bill would have a long term positive impact on communities besieged by mounting foreclosures and the rights of foreclosure litigants. It is intended to add efficiencies to a very inefficient foreclosure process. The bill would benefit distressed homeowners who have to pay these costs and the communities affected by vacant homes and the foreclosure crisis. Read more in August 23, 2010, article in REO Insider, Illinois title company says HB 5055 would streamline foreclosures, or visit Advocacy in Action on our website. ATG has and always will be here to advocate for and protect the interests of you and your clients. Please feel free to contact us, we invite your thoughts on either or both of these important topics.
Peter J. Birnbaum
President and CEO |
| Title Insurance Updates from the
Illinois Department of Financial and Professional Regulation
Illinois Title Insurance Act Procedures Regarding Good Funds
ATG members and closers have been following the new "Good Funds" law since it became effective January 1, 2010. All Illinois title insurance underwriters recently received a statement from the Illinois Department of Financial and Professional Regulation that reinforces those procedures. It is our responsibility to pass this information along to all ATG members and closers.
By way of background, you will recall that the amendment to the Title Insurance Act impacts disbursements made by title insurance companies and title insurance agents out of fiduciary trust accounts in connection with escrows, settlements, and closings in Illinois. This new legislation defines "good funds" and "collected funds" and prohibits disbursement unless the funds received are good funds or collected funds as defined in the amendment. Please review the information available on ATG's website on this topic, Good Funds: Common Situations and How ATG Will Handle Them
The following is an excerpt from the statement recently issued by the Illinois Department of Financial and Professional Regulation, reinforcing the above-referenced statutory language and rules:
"...an escrow agent may not disburse funds from any escrow account prior to the time that a deposit into that escrow account has cleared and the money has been made available in the escrow account.
This conclusion is not changed by the Act's "good funds" provision. See 215 ILCS 155/26. That section sets forth exceptions to the rule prohibiting disbursement before deposits have cleared. If none of the exceptions applies, disbursement must not be made until the deposit check clears and the funds are available in the escrow account." Click here to read the entire Statement Regarding Disbursements by Escrow Agents before Escrow Deposits have Cleared from the Illinois Department of Financial and Professional Regulation.
ATG members and closers should note that the statement is only to clarify that title insurance companies and their agents must follow the Good Funds law. Feel free to contact us with questions on these procedures.
Title Insurance Agents Must Maintain Current Address Information with Underwriters
The title insurance section of the State of Illinois Department of Financial and Professional Regulation (IDFPR) requires that underwriters maintain their agents' current address information. To comply, attorneys acting as title agents must provide their underwriters with their current contact information; provide changes within ten days of effective date. See details.
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| ATG MEMBERS | Underwriters' Bulletin
This section for ATG members only provides updated procedural and underwriting information. If you keep hard copies of our Member Handbooks in your office, print this information for insertion.
Login required to view links. CLAIMS CORNER
Exclusions from Coverage: Created, Suffered, or Assumed | The jacket that accompanies the title policy outlines the terms and conditions of the contractual relationship between the title insurance company and the insured. The first part of the policy jacket outlines what constitutes covered risks under the policy. The policy jacket then outlines the exclusions from coverage. This Claims Corner deals with the exclusions from coverage for matters that are created, suffered, or assumed by the insured... read more
Procedural Updates
Foreclosure | IMPORTANT! In the wake of ABN AMRO Mortgage Group, Inc v McGahan, ATG has revised its underwriting guidelines for mortgage foreclosures... read more
Foreclosure: Mortgage Foreclosures and Res Judicata | Mortgage foreclosures often involve parties who are defaulted. Those parties may have had valid defenses to raise, had they appeared in the case. When does res judicata prevent a party from asserting his or her interest after the judgment of foreclosure?... read more
Authorization to Issue over $3 Million | No title insurance commitment or policy may be issued by an ATG agent on real estate transactions where the policy liability amount is over three million dollars ($3,000,000) without prior ATG approval... read more
Title Insurance Agents Must Maintain Current Address Information with Underwriters | The title insurance section of the State of Illinois Department of Financial and Professional Regulation (IDFPR) requires that underwriters maintain their agents' current address information. To comply, attorneys acting as title agents must provide their underwriters with their current contact information; provide changes within ten days of effective date. See details.
ATG Member Agents: View your member profile and submit updates from the member section of our website... read more
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OF NOTE | Newsworthy Members and Staff
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| IN THE NEWS | Volunteer Lawyers Needed
More Events Scheduled in Chicago Area
ATG continues its partnership with the City of Chicago and Neighborhood Housing Services to offer a series of free events to help distressed homeowners apply for loan modifications under the Federal government's HAMP program.
Volunteers Needed --- Lawyers and support staff, especially those fluent in Spanish. Volunteer Now if you'd like to help.
Recent Fix Your Mortgage Event a Success | More than 450 families at risk of foreclosure received free assistance completing and submitting loan modification applications at the fifth of six Chicago Fix Your Mortgage foreclosure prevention events, Saturday, August 21, at Northside College Prep High School, Chicago.
Homeowners received professional help and guidance from approximately 130 volunteer HUD-certified counselors, real estate attorneys, and other volunteers. Thank you to all our volunteers! To view photos, click here and use the password fym2010.
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WHAT'S NEW | Member, CLE, Process, and Trust Services
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[Last update: 8-31-10]
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