Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Hidden Defects in Title
Hidden defects in title are one of the nightmares of the title insurance industry – as well as one of the protections that make the purchase of title insurance the more alluring. Although only experience may supply the ultimate answer, there is a possibility that the new “predatory lending law” in New York will generate lurking infirmities in titles devolving through mortgage foreclosure actions that may render tenuous the issuance of insurance on such properties. (L.2002, ch.626, amending the banking law, the general business law and the real property actions and proceedings law.) The immediate heart of the issue relates to the new RPAPL 1302, entitled “Foreclosure of High-cost Home Loans.” Subsection (1) now requires that any complaint served for foreclosure of a high-cost home loan must affirmatively allege that the plaintiff has complied with all the provisions of banking law section 595-a and 6-1. In addition, that allegation must be proven to the satisfaction of the court before judgment (by default or otherwise) can be entered. Subsection (2) specifically denominates as a defense to foreclosure that the home loan violates any provision of section 6-1 of the banking law.
Although there is much more about the new statute yet to analyze, here are some scenarios, and the questions they raise, which might give pause to underwriting counsel:
- First scenario. A property is struck down in foreclosure to the highest bidder. That bidder solicits a title search and title insurance. The complaint did not allege, not did mortgagee prove, compliance with all the provision of banking law sections 595-a and 6-1. If the mortgage was not a high-cost home loan (an analysis the title company must undertake), there is presumably no issue because the affirmative allegation could not have been required.
- Second scenario. If the title company confirms that the mortgage was in the high-cost category, but the foreclosing mortgage holder neither asserted nor proved compliance with the statute, the possibility of serious danger prowls so presumably an insurer would be reluctant to insure the title.
- Third scenario. Change the facts to a case where the mortgage is concededly a high-cost home loan but the allegation is both pleaded and proven, a predicate for judgment of foreclosure and sale. Can the title company evaluate whether compliance with statutory dictates really exists – just in case a defaulting borrower (or some other party) surfaces after the sale to challenge the action? Mindful that the new statute imposes a plethora of mandates and prohibitions, as well as harsh and extensive enforcement mechanisms, there may be room for doubt in resolving scenario number three.
Dangers in Enforcement
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.