Gramm-Leach-Bliley Amendments to the NC Insurance Information and Privacy Protection Act • Mobile and Manufactured Homes • Deed of Trust Cancellation • Upset Bid Procedure for Judicial and Execution Sales • Outstanding Taxes Statement Timing • Future Advances Statute

The upcoming 2001-2002 legislation session is expected to be very interesting with several proposed bills already making their way for consideration. NCLTA is actively involved in consideration of two legislation proposals and carefully watching several others.

Gramm-Leach-Bliley Amendments to the NC Insurance Information and Privacy Protection Act    (back to top)
NCLTA has presented its written comments and analysis to the office of the NC Commissioner of Insurance as the latter prepares proposed amendments to NCGS Ch. 58 Art. 39, the NC Insurance Information and Privacy Protection Act, to have it come into compliance with the federal Gramm-Leach-Bliley Financial Services Modernization Act. In general, the NC Privacy Law, is more protective of consumer privacy than (G-L-B); however, there are some components of the North Carolina law that will need to be strengthened to meet G-L-B floors.

Our first suggestion is to leave in place the general exception regarding information collected in the public records and maintained for title insurance purposes. Our second suggestion is to continue to permit, to the extent title insurance is covered, the initial notice of privacy practices to be delivered with the policy of title insurance. Our third suggestion is to avoid adoption for title insurance of G-L-B's requirement for annual notice of privacy policies and practices. Finally, NCLTA suggests maintaining, without amendment, the "notice-and-opt out" procedure for disclosure of limited consumer information for marketing purposes. At press time, it remains to be seen what the content of the Commissioner's proposed amendments will contain. NCLTA Attorney member Donald Lampe of Smith, Helms in Greensboro has been presenting NCLTA's interests to NCDOI.

•  •  •  •  •

Mobile and Manufactured Homes    (back to top)
The Executive Committee of the North Carolina Land Title Association is proposing a bill to simplify procedures to convert mobile or manufactured homes to real property and to maintain public records regarding same. The current bill is still in a Legislative subcommittee, chaired by Chris Burti, subject to approval by the Executive Board at its February 13, 2000, meeting. The basic outline of the proposal is as follows:

With regard to any homes for which the DMV title is to be canceled and the home is to be treated as real property:

The following minimum requirements must be evidenced:

1. Notice should be forwarded to the office of the appropriate local tax collector informing them of the improvements, if no building permit is issued. Thereafter, the local tax collector's office should look at these certifications just as they do deeds in order to update their listing records for the upcoming year. In addition, the owner would be required to correct their listing at the next listing period in January, just as with all improvements to property. Thus, the property would become taxed as a part of the real estate as of the next tax listing, notwithstanding that at the earlier listing they would be personal property under N.C.G.S. 105-330. (N.C.G.S. 105-273(13).
2. The certification would become a part of the chain of title in the office of the Register of Deeds in which the land is located. Therefore, the home must be owned by and the Declaration signed by the record owner of the land. It should, therefore, be given record recognition for priority purposes just as any deed under N.C.G.S. 47-18.
3. Any lien holder must join in the cancellation, whether a DMV, UCC, or deed of trust lien holder.
4. An instrument satisfying the Declaration of Intent below must be recorded with both the Division of Motor Vehicles as well, either to cancel an existing title or to satisfy the perfection requirements in substitution of issuance of a new title.

With regard to new homes to be attached to a permanent foundation, or existing homes for which the Certificate of Origin is located, and no DMV title is desired:

Declaration of Intent to Permanently Affix Personal Property to Real Property

N.C.G.S. 47-18.4 (as proposed) would be filed with Register of Deeds, and original or certified copy forwarded to the Division of Motor Vehicles (with $35.00 fee), including:

• Certification that the wheels, tongue and axle of the home have been removed; the home has been placed on a permanent foundation with permanent connection to utilities, such as electricity, water, sewer, gas, telephone, etc., as appropriate.
• Attach original Certificate of Origin
• Legal description of the property to which the mobile home is attached
• Signed by the current record owner (at the time of recording) of the property to which the mobile home is attached, recorded within the chain of title of said property. Owner of the home must be same as the owner of the land.
• Joinder or release by any record lien holder of the DMV title or UCC Financing Statement
• Fee of $35.00
• Establishes priority as of date of recording, as with deeds (N.C.G.S. 47-18) or deeds of trust (N.C.G.S. 47-20)

With regard to current homes for which no DMV title record can be located and the Certificate of Origin is not locatable or a new one obtainable:

Recording Declaration of Intention, however, in lieu of the Certificate of Origin or Certificate of Title, evidence satisfactory to the Division of Motor Vehicles must be provided that the home is intended to be owned by the current owner of the land. Such evidence might include:

• Deeds with transfer stamps or recitals indicating the home was intended to be conveyed
• Copy of contract of purchase and sale, evidencing purchase by the owner of the home
• Tax bills indicating that the home has been located on the property for at least 5 years and treated as real property, taxable to and owned by the land owner

With regard to current homes for which DMV title held in name of prior owner:

Recording Declaration of Intention, however, in lieu of the Certificate of Origin or Certificate of Title, evidence satisfactory to the Division of Motor Vehicles must be provided that the home is intended to be owned by the current owner of the land. Such evidence might include:

• Deeds with transfer stamps or recitals indicating the home was intended to be conveyed, from the record DMV title holder through and including the current landowner
• Attorney certification of title from the DMV title issuance date to current date, indicating the DMV title holder was also the land owner, and the chain of conveyances with transfer stamps or recitals through and including the current land owner, indicating that the home must have been intended as part of the conveyances
• Copy of contract of purchase and sale, evidencing purchase by the owner of the home
• Tax bills indicating that the home has been located on the property for at least 5 years and treated as real property, taxable to and owned by the land owner

Specific statutes requiring amendment:

• 105-273(13)
• 143-139.1
• 47.18.4 (to be added by defining the Declaration of Intent above, its priority as of date of recordation)
• 20-51(1) (to be amended by adding an exemption from the requirement of registration and certificate of title for manufactured homes on permanent foundations)
• 20-58.7 (b) (to be added identifying voluntary cancellation)
• 20-58.8(b)(4) (to be added, exempting deeds of trust on homes for which Declaration of Intent has been recorded)
• 20.79.2 (adding transporter plate authority for modular homes)
• 25-9-302(e) (including exemption from UCC for "motor vehicles" upon compliance with G.S. 47-18.4, G.S. 105-273(13) and G.S. 20-58.7(b) above)

The Manufactured Housing Institute legislative committee will meet January 25 and will consider our proposal at that time. We hope to have their feedback soon thereafter. Other comments and suggestions should be submitted to Chris Burti at Statewide Title, chris@statewidetitle.com, phone 252/321-0050.

•  •  •  •  •

Deed of Trust Cancellation    (back to top)
The Deed of Trust Cancellation provisions in section 45-37(a) of the North Carolina General Statutes is proposed to be revised to include an additional subsection (7) as follows:

(7) After the satisfaction of the provisions of any deed of trust or mortgage or other instrument intended to secure with real property the payment of money or the performance of any other obligation and registered as required by law, and in the event the holder of the evidence of said indebtedness or trustee thereunder has failed or refused to register satisfactory cancellation as required by law within 90 days following said payment in full, by exhibition to the register of deeds of an Attorney's Certification. Such Attorney's Certification shall contain, at a minimum:

1. Identification of the specific deed of trust, including grantors, trustee, beneficiary, date, maximum principal amount, book and page of recordation
2. Current holder of the indebtedness to whom payment in full was submitted. If other than the original beneficiary, the Attorney's Certification should include an explanation of the assignments or changes of name through which the indebtedness was transferred to the
3. current holder so identified or other verification relied upon to determine the current holder
4. Reference to and inclusion of a copy of written payoff statement received from the holder
5. Reference to and inclusion of a copy of the check, reflecting deposit by and payment to the above holder, in conformity with the payoff statement in c. above
6. Reference to and inclusion of a copy of the written demand to the lender that said deed of trust be cancelled of record
7. That, upon due request, the attorney has verified that no outstanding amount is demanded by the above holder upon said indebtedness
8. The date of payment in full of the entire indebtedness, which date is no less than 90 days prior to the date of this Attorney's Certification
9. Execution by an attorney at law licensed in the State of North Carolina, with inclusion of their North Carolina State Bar License number.
10. Acknowledgment of said attorney's execution by an officer authorized to take acknowledgments.

Upon exhibition of the Attorney's Certification and accompanying payoff statement, copy of check and demand letter, the register of deeds shall record same, and shall cancel the deed of trust, mortgage or other instrument as required by G.S. 45-37.2. No fee shall be charged for recording any documents or certifying any acknowledgments pursuant to this subdivision. The register of deeds shall not be required to verify or make inquiry concerning the authority of the person executing the Attorney's Certification to do so.

•  •  •  •  •

Upset Bid Procedure for Judicial and Execution Sales    (back to top)
Attorneys Tom Steele and Joe Kalo of Wishart, Norris in Burlington have been working on proposed legislation to make the upset bid and sale process more efficient and faster by making it similar to the foreclosure statute. This legislation is currently under consideration by the General Statutes Commission.

•  •  •  •  •

Outstanding Taxes Statement Timing    (back to top)
A bill to authorize statement regarding outstanding taxes within a "reasonable time" of request has been drafted to revise Section (a) of Section 105-361 of the North Carolina General Statutes, by adding the following: Such Certificate shall be provided or available to the person requesting same within 1 business day of the receipt of the request by the tax collector; provided, however, that in a case requiring more complicated research or calculations, the tax collector shall so advice the requesting person and shall identify a reasonable time thereafter within which the Certificate shall be provided.

Future Advances Statute    (back to top)
A bill to amend the Future Advances statute to include later notes not specifically covered by a loan agreement of even date with deed of trust has been drafted to revise Subsections (2) and (3) of Section 45-68 of the North Carolina General Statutes as follows:

(2) At the time of incurring any such future obligations, each obligation is evidenced by a written instrument or notation, signed by the obligor and stipulating that such obligation is secured by such security instrument; provided, however, that this subsection shall apply only if either (a) the obligor and obligee have contracted in writing that each future obligation shall be evidenced by a written instrument or notation or (b) no future advance note or loan agreement shall have been executed contemporaneously therewith specifically describing the terms and conditions of contemplated future advances to be secured thereby, such that the original deed of trust shall be the only evidence of potential future obligations to be secured and the note executed at the time of each such future advance referencing said deed of trust shall be the sole evidence of the indebtedness secured thereby. Future advances or notes executed pursuant to this subsection (b) shall be secured by and have lien priority under said deed of trust, if in compliance with subsection (1) hereof, as if so provided in a separate loan agreement or future advance not executed contemporaneously with said deed of trust; and

(3) At any time a security instrument securing future advances is transferred or assigned by the owner thereof, or a request is made by the borrower or borrower's representative for the total amount secured hereby, that the amount, date, outstanding balance and due date of each note, bond, or other undertaking for the payment of money representing a future obligation secured by such security instrument be noted in writing thereon.

This paragraph keeps the page at full width. This paragraph keeps the page at full width.