Estoppels for Subsequent Owners

02/02/2012 8:18 PM | Anonymous
Update 2/2/12 

SB 1050 is on the agenda for the Senate Banking and Insurance Committee for 2/7/12 at 1:30.   After this, it will have one additional committee stop in Senate Judiciary.

1/31/12 -- One of the issues periodically faced by title agents is how to get a mortgage estoppel information when the mortgagor is no longer in title. They've passed, a subordinate lien was foreclosed, or the property was sold "subject to" without a formal assumption.   Many lenders took the position that they were not permitted to provide any information because it would be a violation of their privacy obligations to the original mortgagor.

HB 505/SB 1050 attempts to address this issue by requiring lenders to provide a payoff amount and per diem estoppel (but no other detail) when presented with a request from or on behalf of the current owner of the property. The request must include a copy of the instrument vesting title in the new owner. 

Today, HB 505 unanimously passed its second committee of reference, and has one more committee stop with the Economic Affairs Committee (Chaired by FLTA 2011 Legislator of the Year Dorothy Hukill).

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