MLTA Legislative Update - May 2013

MLTA Legislative Committee Co-chairs Nancy Landmark and Sue Basiago

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It has been a busy year at the Minnesota Legislature, despite anticipation that efforts would be focused on budget issues. As of May 10, the Governor has signed 52 bills into law, another nine have passed both houses and been presented to the Governor for review, and many more are still pending. These bills affect a wide range of issues, only some of which directly affect our businesses. We’ve been negotiating with various interested parties on a number of bills, including modifications to the Foreclosure rules and requirements. This remains an open issue this session and we encourage you to stay tuned.

Changes to be aware of:

Chapter 10 (SF249/HF87) – This is the bill sponsored by the MSBA and makes a number of technical corrections. Key terms include: Affidavits of Survivorship must now include the name and address for tax statements, just as on a deed. Section 507.403 was amended to confirm that an assignee may record a Certificate of Partial Release by Assignee, as well as a full release or satisfaction of mortgage. On possible item of concern in this bill is the language is that, while it makes it clear that if such a Certificate is erroneously filed the borrower is not relieved of the obligations under the underlying documents, it also provides that a person who “wrongfully, erroneously, or without authority executes or records the certificate and any entity on whose behalf the certificate is wrongfully, erroneously, or without authority executed or recorded, is liable to the mortgagee, the mortgagee’s assigns, or any person or entity for actual damages sustained due to the execution or recording of the certificate, together with reasonable attorney fees, costs, and disbursements incurred by the damaged party as a result.” This bill also clarifies that at the time of filing a verified claim of unregistered interest, it is necessary to mail a copy of the Notice to the persons whose interests are affected by the claim.

Chapter 23 (SF327/HF232) - Modification of the Statutory Short Form Power of Attorney. Several changes have been made to the Minnesota Statutory Short Form Power of Attorney form which will take effect January 1, 2014 and apply to powers of attorney executed on or after that date. The new form substitutes a new paragraph “THIRD” which prohibits the attorney-in-fact from making gifts to the attorney-in-fact or anyone the attorney-in-fact is legally obligated to support unless specifically authorized. Annual gifts to the attorney-in-fact or anyone the attorney-in-fact is legally obligated to support are limited to an amount that does not exceed the federal annual gift tax exclusion amount in the year of the gift. In addition, the new form includes several notices and warnings to both the principal and the attorney-in-fact. On the new form, the specimen signature of the attorney-in-fact must be notarized. Powers of Attorney executed prior to January 1, 2014 remain valid and can be relied upon. If executed after January 1, 2014, the new form must be used.

Chapter 24 (SF350/HF369)Uniform Community Property Rights at Death Act. New chapter 519A, Provides rules for disposing of property that was acquired by a married person “as or became, and remained” community property under the laws of a state that recognizes community property. This law preserves the rights of each spouse in property that was community property before the spouses moved to Minnesota, unless they have severed or altered the community property rights.

Chapter 74 (SF925/ HF1054) - Marriage between two persons provided for. Defines civil marriage as between two persons. The Governor signed this bill and it takes effect August 1, 2013. Of significant impact on real estate transactions, we cannot assume that two same gendered persons are not marred to one another. It will require additional inquiry in anticipation of closing. Some have suggested that we will can address this on conveyance documents in the form of “a and b, married to one another.” Title Insurers will further advise their agents about the required form of documentation of marital status.

Chapter 143 (SF552/HF677)Omnibus Tax Bill.   Among numerous other provisions, both the House and Senate versions of the Omnibus Tax bill contained provisions reinstating the increased state deed tax and mortgage registry tax in Hennepin and Ramsey County to fund the counties’ Environmental Response Funds. The increase will apply to documents acknowledged on or after July 1, 2013. The bill is currently in the Conference Committee. We have been informed that the conferees have agreed to include the provision in the final bill and that the sunset provision will be 15 years in the future (2028). MLTA testified on multiple occasions with respect to this issue to assure that clear language would be included as to documents to which the increased tax applies.

Chapter 115 (SF1276/HF1377)Foreclosure modifications. These new law will significantly impact how foreclosures occur and when. The bill prohibits “dual tracking,” which is commencing or continuing with a foreclosure process after receiving a request for modification from a borrower. The bills also prohibit the filing of the Notice of Commencement unless all “loss mitigation obligations” have been satisfied. MLTA and the MSBA have been working to negotiate changes to the bills which would make it possible to continue to insure post-foreclosure. The final version includes language that, while not entirely satisfactory, will likely allow us to insure after we can search the real estate records through the end of the borrower’s redemption period.

Other pending bills which may affect your business include:

Chapter 9 (SF1/HF5)Health Care exchange. Creates the Minnesota Insurance Marketplace to comply with the Affordable Care Act

(SF3/HF92)Minimum Wage, overtime and parental leave. Increases minimum wage in Minnesota over a period of time; mandates that overtime pay apply to all hours worked in excess of 40 hours per week; and increases unpaid parental leave to 12 weeks. This bill is currently in conference committee. Reports this week indicate that this is not likely to pass, but keep your eyes open!

MLTA Legislative Committee Co-chair Nancy Landmark Testifying
MLTA Legislative Committee Co-chair Nancy Landmark
testifying before the Senate Commerce Committee
to introduce the title insurance industry

On another front, MLTA was amply represented at the ALTA Federal Conference May 6-8 in Washington D.C. MTLA members in attendance included: Marty Henschel, Sue Basaigo, Jeff Blum, Rob Chapman, Nancy Chapman, Nancy Landmark, Jodee Welshons and Richard Welshons. (Not Pictured, Ron Blitenthal and Dan Wold). Members attended a variety of programs including updates on National Advocacy, State Advocacy, Agents and Underwriters section meetings. We spent a significant amount of time discussing and interacting over the ALTA Best Practices. In addition, MLTA members participated in breakfst with Sen. Heidi Heidtkamp of North Dakota, lunch with Rep. Shelley Moore Capito of West Virginia, and met with many people at various receptions, both at Capitol Hill and elsewhere. On the final day of the conference, our Minnesota contingent joined 240 others in attending 275 meetings on Capitol Hill. We met with staff from Sen. Franken’s office, Rep. Kline, Rep. Paulsen, Rep. Peterson, Rep. Walz and Rep. Bachman. In addition to meeting with the staff of Rep. Rick Nolan, several of us had the opportunity to meet with him directly.

We found that our message this year seemed to resonate in Washington, both with Democrats and with Republicans. One focus was, of course, the pending CFPB Final Rule (anticipated in September) and asked that each office join in sending a letter to the CFPB encouraging flexibility around the three-day rule and the need to re-disclose when numbers change between the disclosure and the time of closing. We also addressed the need to maintain a federal presence in the face of GSE reform to maintain high standards both with credit and collateral underwriting. Finally, we reinforced the message that has been delivered repeatedly about the important role that we, as settlement agents play at the closing table, and the importance of maintaining that role.

ALTA Federal Conference 2013 ALTA Federal Conference 2013
Marty Henschel, Sue Basiago, Jeff Blum, Rob Chapman, Nancy Chapman, Nancy Landmark,
Jodie Welshons and Richard Welshons
Mark Harrison, Rep. Rick Nolan, Richard Welshons and Nancy Landmark

If you haven’t made the opportunity to take part in this event or in MLTA’s Day at the Capitol, I highly encourage you to do so. The Minnesota event is a one-day program that will be held on March 10 in 2014. We will provide you with briefing information regarding current topics, talking points, and we will arrange for your meetings with your state legislators. This is a great way to get involved and make sure that you are heard and considered when issues affecting our industry are before the Legislature. It is also a fun and exciting day.

Jean Link and Sen. Hawj
Jean Link and Sen. Foung Hawj at MLTA’s
2013 Day at the Capitol
Mark your calendars!  MLTA’s 2014 Day at the Capitol - Monday, March 10, 2014.

If you have questions about the issues outlined above and how your can get involved, please contact MLTA's 2013 Legislative Committee Co-Chairs:

Nancy Landmark
Commercial Partners Title, LLC
(952) 337-2470
Sue Basiago
Midland Title
(612) 866-6102