Supporting, Informing & Connecting People in Foreclosure
Below is an initial draft of top reasons for document rejection. The list is not all inclusive and laws of course vary by state. It is a general reference guideline that relates to conveyance and security instruments.
One of the problems with foreclosures and land title (generally speaking) are risks inherent from purchasing a property with unknown, undisclosed or undischarged liens. The finance industry went from temporarily delusional to downright felonious in some of their business practices. The record number of investigations into fraudulent business practices, investor class action lawsuits, homeowner lawsuits and recent settlement agreements lends credibility to the fact that something went terribly wrong.
Part of the problem was that during the run up and peak of the housing market lenders were loaning money at a rapid pace on real estate sales and home equity 2nd loans using 'limited' or 'present owner' title searches. This means that title abstractors and title examiners went back 1 owner in the chain of title to search for records that may have adversely impacted title to the property. The one owner was typically the current owner and no consideration was given to prior title flaws.
*THEY MISSED A LOT. Now that the market has dramatically changed, we need more attention and oversight at the local level to preserve and protect land values and property records.
*MANY PROFESSIONALS in the lending, title and real estate industry rely on title insurance companies to assure their clients that they will be protected when buying or selling real property. You often hear the words “that’s what title insurance is for.” What you don’t hear is that title insurers do not insure matters not of record. Off book transactions are not covered unless there was a separate rider added to the policy that would have covered matters not of record. In a majority of cases this would leave out the possibility that title insurance would offer protection from an undisclosed interest claiming lien-holder status on an off book transaction that involved the alleged sale of a note. The title insurance commitment and closing instructions would have required a discharge or subordination of any undischarged lien prior to closing. Whatever transpired subsequent to closing was likely an uninsured or uninsurable event from a title insurance standpoint.
Title insurance is optional, you are not required to buy it and there are policies available to protect the lender and owner from certain limited risks. Homeowners may or may not have received a copy of their title insurance commitment at closing including copies of their signed HUD statement and other closing documents. Also, as you know we often hear stories of people who never received copies of their final title policy. There are dozens of things that can and do adversely impact title. Current and previous owner; divorce, probate, bankruptcy, mortgage, ucc lien, irs lien, code enforcement lien, hoa or condo lien, judments in favor of state & us govt, state tax warrants and other encumbrances are just some of the things that can potentially cloud title.
Now more than ever Clerks and Register of Deeds need to be proactive in preventing their registries from becoming overwhelmed with bad documents and erroneous filings. It is one thing to say that a registry has low standards but to say that there are no standards for recording (as in those Clerks and Registrars who state "we record as presented") is completely absurd and patently false. Clerks and Recorders do not and should not "record as presented" and they know it. The Clerks and Registrars are our first line of defense and we should expect them to abide by the highest standards possible in order to prevent the erosion of property rights from further taking place.
Does the Clerk of Court really "record as presented?"
1. Illegible Document.
2. Incorrect Fee.
3. Missing Signature.
4. Signature does not match.
5. Notary stamp missing.
6. Notary date missing.
7. Incomplete notary.
8. Prepared by statement missing.
9. Names not printed/typed under signature.
10. Grantor address missing.
11. Grantee address missing.
12. Reference from previously recorded deed missing.
13. Marital status of Grantor missing.
14. Recording district not included on face or within document.
15. Return to info missing.
16. Tax affidavit missing.
17. Inadequate space for recording certificate.
18. Heading/caption of the instrument is missing.
19. Document not authorized by state to be recorded.
20. Not an original document.
21. No witness signatures as required by state.
22. No legal description or inadequate legal.
23. Missing signature of non-titled spouse.
24. Date of execution of document missing.
25. No real estate transfer declaration or exemption stamp clause.
26. Disclosure statement missing or incomplete.
27. Corporate seal missing or illegible.
28. Taxes not paid with submission.
29. Missing parcel Identification number.
30. Indexing instructions missing.
31. Transfer statement or intake sheet not included.
32. Declaration of value form not submitted.
33. Separate document required for discharge.
34. Signature inconsistent with names on document.
35. Lack of original signature.
36. Miscalculated doc stamp and/or transfer tax.
37. Special forms not submitted with deed.
38. Statement of consideration missing.
39. Reference to original documents missing from subsequent docs
(corrective or re-recorded documents.)
40. Any part of the text, including attachments are illegible or incapable
41. Certificate of residence (homestead) missing or unsigned.
42. Oath of value missing.
43. Documents references exhibits but none attached.