Marketable Title Mayhem – August, 2020

Welcome to the 9th edition of MTM. Your comments and feedback are always welcome!

Happy August everyone. The business report is a repeat of last month – things are fast, furious, crazy and generally stressful. Thanks for sending in your policies. Reminder: Performing slow and careful, post-closing updates has never been more a more essential task in order to find and fix those pesky errors.  A stitch in time saves nine, right? That proverb was first recorded in Thomas Fuller’s Gnomologia, Adagies and Proverbs, Wise Sentences and Witty Sayings, Ancient and Modern, Foreign and British, 1732.

Please be sure to escape for personal time to keep your battery charged. Vitamin D (sunshine) is essential and – dare I say it – the days are already getting shorter. All work and no play makes Jack a dull boy (a proverb used in The Shining but it first appeared in James Howell‘s Proverbs in English, Italian, French and Spanish (1659)). Okay, no more proverbs! We hope that MTM affords you a few quiet minutes away from the stresses of dealing with all that is swirling around out there. 

From the VATC team to you, please know that we appreciate all that you continually do to serve the needs of your clients. Your ability to navigate challenges is inspiring. We salute your hard work. Be safe, be well and good luck on this month’s quiz 

P.S. An astute reader noted that for the June quiz, the correct section of Title Standard 18.3 which applies to discharges relative to re-recorded mortgages (due to deficiency in the execution) should have been 18.3B (not 18.3C).

Rules

• There are no rules. You may use research, statutes, cases, Title Standards, etc.
• Firm/Team entries are welcome – just give it a name!
• Submit your answers from the web form on this page.
• We will post the answers in the Honor Roll with the next blog.
• Feel free to share this with friends and colleagues

This quiz is closed – see the answers in bold below. To view August’s winners please visit our Honor Roll page.

1. Which of the following operates to discharge a Judgment Order lien?
   1. An instrument releasing the Judgment Order, with reference to the lien and recording information, signed and acknowledged by the holder of the lien.
   2. An instrument releasing the Judgment Order, with reference to the lien and recording information, signed by the holder of the lien and submitted to the Court.
   3. A dismissal of the action ordered by the Court.
   4. Answer a or c.  [Either a or c operates to discharge the lien]
2. You represent a buyer. Seller’s attorney provides you with sale documents, which include a Power of Attorney. You review the POA carefully to determine whether it is valid to convey title to your buyer client. You note that it does not comply with Vermont law but it was executed in Florida. You determine the POA is:
   1. Invalid unless executed and acknowledged in Vermont.
   2. Valid if it was remotely notarized by a Vermont Notary Public pursuant to VT’s Emergency Administrative Rules for Remote Notaries Public and Remote Notarization.
   3. Valid under the Full Faith and Credit clause of the Vermont Constitution.
   4. Valid under Vermont’s POA reciprocity statute if seller establishes that the POA was properly executed and acknowledged under FL law and is valid to convey real property in Florida.
3. You are settlement agent and represent borrowers in a refinance. The property is owned by H&W, Trustees of the H&W Trust. The Trustees execute a Delegation of Authority to you pursuant to 14A VSA Sect. 807. You execute the mortgage by signing on behalf of both the H&W, as Trustees, and the H&W individually. What is the problem, if any?
   1. You inadvertently made the H&W personally obligated under the loan and their individually owned assets are now at risk.
   2. You did not have authority to execute the Mortgage on behalf of the H&W as individuals, only in their capacity as Trustees under the Delegation of Authority [answer “a” is incorrect because signing the mortgage alone does not create a financial obligation].
   3. You cannot act as both settlement agent and agent under a Delegation according to the Vermont Trust Code.
   4. There is no problem.
4. True or False: Your title search reveals a Reverse Mortgage conveyed by the seller to ABC Bank. Recorded immediately thereafter is a second mortgage from seller to the Secretary of Housing and Urban Development (“HUD”), securing the exact same amount as the mortgage to ABC Bank. When the mortgage is paid in full and a discharge is recorded for the ABC Bank mortgage, you do not need a discharge from HUD because it’s for the same amount.
   1. True
   2. False  See Title Std. 18.7.
5. Your title search reveals a deed from XYZ, Inc. to the current owners/sellers. There is no corporate resolution recorded. The deed is signed by Connie Corporate with no reference to her authority or to her appearance on behalf of the Corporation in the signature line. However, in the notary clause she is identified as a duly authorized agent of XYZ, Inc. You determine:
   1. The deed is invalid because there is no Corporate Resolution of record.
   2. The deed is invalid based on Title Standard 20.1, Comment 4.
   3. The deed is valid based on Title Standard 20.1 and Comment 4. [The Comment provides that if “there appears in the instrument a recital of authority such words as ‘agent’, ‘duly authorized’ or ‘by’ or ‘for’ or similar terms or by official position, the presumption of this Standard shall apply].
   4. The deed is valid based on Title Standard 22.1 (A).