Title Insurance

Fannie Mae will accept attorney opinion letters in lieu of title insurance

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Fannie Mae’s updated Selling Guide now allows attorney opinion letters in lieu of title insurance in some circumstances. This change aligns Fannie Mae with Freddie Mac’s similar announcement. Will the marketplace change dramatically because of these policy announcements. I hope not and I doubt it.

Fannie Mae touts its change as a method to reduce costs for borrowers. I don’t believe South Carolina lawyers will issue title opinions for residential loans that will be less expensive than title insurance. I know I wouldn’t.

The guidance indicates opinion letters will not be accepted where the loan is secured by a condominium, a leasehold estate, or a manufactured home.

According to the guidance, the attorney’s title opinion letter must:

  • be addressed to the lender and all successors in interest of the lender
  • be commonly accepted in the area where the subject property is located
  • provide gap coverage for the duration between the loan closing and recordation of the mortgage
  • list all other liens and state they are subordinate
  • state the title condition of the property is acceptable and the mortgage constitutes a lien of the required priority on a fee simple estate in the property

Do you see any problems with this list? I’ve never issued an opinion letter that provided gap coverage and I don’t recommend that you accept that risk in your transactions. What happens if you update title and discover a mechanic’s lien recorded in the gap? That lien would become your problem as the attorney who agreed to cover the gap as of the date of the opinion letter or the closing date.

Before the general use of title insurance, attorney’s routinely issued opinion letters to lenders and buyers. But title insurance has historically been determined to be the better choice.  Attorneys should not be responsible for title problems that cannot be discovered through a title examination.  A forgery in the chain of title, for example, would be covered by title insurance but should not be covered by an attorney’s opinion. The same may be true for missing heirs, matters that may be apparent from a visit to the property and survey matters.

But it concerns me that lenders who accept attorney’s opinions may perceive those items (and others) to be covered. To ensure your opinion letters are not perceived to cover matters outside the title examination, proper “exceptions” should be added to your letters. To protect you, your law firm and your malpractice carrier, your letters should contain many paragraphs of exceptions!

My best advice is to resist this proposed change in the marketplace. I believe title insurance provides the best coverage for owners and lenders, and it indirectly provides protection for closing attorneys. We can be encouraged that Freddie Mac’s similar announcement two years ago has not greatly impacted our industry. Let’s hope Fannie Mae’s announcement will have a similar reaction.

How do you advise clients on issues of insurable title vs. marketable title?

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An age-old question for dirt lawyers: how do you explain the state of title to your client where you have discovered a title defect but you were able to obtain affirmative coverage over that defect from your favorite title insurance company?

I spent over two thirds of my legal career working for a title insurance company. A title insurance underwriter’s job involves, for the most part, fielding title questions from practicing lawyers. Questions go something like this: “Two links back in the chain of title, there is a deed from an attorney-in-fact to herself for no consideration. Is that a problem?”  What the caller really means is: “I found a title defect in the chain of title and want to know whether you will insure over it.”

The underwriter will answer “yes” or “no” and discuss whether the title defect is a real concern or merely a technical defect that will not cause future problems. Often the discussion will include suggestions of how to “fix” the problem if it can be remedied. And often the discussion will lead to how to insure the title. At the end of the discussion, the two lawyers will have determined whether the title is insurable.

The question of whether a title is marketable is an entirely different matter.  My unofficial definition of marketable title is title that is reasonably free from doubt and acceptable by a prudent purchaser or lender and their attorneys. That definition includes a great deal of reasonableness which means that the standard is open to discussion. I often picture the county’s best dirt lawyer and decide whether that person would close on the title without calling a title insurance company.

Most real estate contracts provide that the seller will deliver marketable title. When the standard is marketable title, the arbiter is the prudent purchaser or lender, their lawyers and, ultimately, the courts. Some contracts call for insurable title, a standard that is determined by title insurance company underwriters.

Let’s look at some examples. Take the case of the power of attorney question above. Case law in South Carolina and elsewhere (and common sense) all lead to the conclusion that this title is probably not marketable. Depending on the passage of time and the estate file for the principal, a title insurance underwriter may agree to insure over the defect.

What if you discover a tax deed in your chain of title? Depending on the age of the tax deed and ownership of the property since that deed, an underwriter may insure the title, but this title is most likely not marketable.

What if your title reveals a deed that recites, “we are all the heirs”, but there is no estate confirming the identity of the heirs? That title is probably not marketable but may be insurable, depending on the facts.

Assuming your underwriter can be convinced to insure these titles, how do you advise your client?

I suggest obtaining informed consent confirmed in writing is the only answer that will protect you and your client.

In a real-life example from private practice days, a doctor client purchased a large house in the Hollywood area of Columbia for his newly blended family. The current survey revealed a very tiny (inches!) violation of a side setback line and a reverter in the chain of title. Technically, the property had reverted to the developer when the house was built in the 1950’s.

Because the violation was so small, I was able to talk my friendly and brilliant underwriting counsel into insuring over it. But because the defect was so technically, if not practically, devastating, I wrote a letter to the client, advising him of the problem, telling him to refrain from adding onto the house which would have made the violation larger and more difficult, and suggesting that any sale of the house should involve a contract drafted by me to provide for insurable, not marketable, title.  I added a paragraph at the bottom to the effect that he understood the conundrum and agreed to purchase the house despite the defect. He dutifully signed the letter.

Did he listen to me? Of course not!

How do I remember this tale so well decades later?

The next time I heard from the doctor and his title was in the context of one of those phone calls a dirt lawyer never wants to receive. A lawyer friend called the day before closing of the sale of the property asking how I managed to close in the fact of the huge (yards, not inches) setback violation with a reverter clause in the restrictive covenants. The doctor had added onto the house and had subsequently signed a standard residential contract requiring marketable title. In the minutes between the phone call and retrieving the file, I lost ten years off my life. But thankfully, the file revealed my CYA letter. 

How was the situation resolved? My law firm brought a quiet title action for the client on his dime. The developer corporation was defunct with no apparent survivors. The court quieted the title, and I lived to practice law another day.

Here is my point. Never fail to explain title defects to your client even if you are smart enough to obtain affirmative coverage. And always obtain informed consent confirmed in writing.

Should closing attorneys issue opinion letters instead of title insurance?

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Fannie Mae just announced it will accept attorney’s opinion letters in lieu of title insurance policies to reduce closing costs. Is this good news for closing attorneys and their clients? Let’s discuss that issue.

When I was an associate in a law firm in the 1980’s, I was taught by the very smart lawyers who owned the firm that title insurance should be less expensive than attorneys’ opinion letters.  In other words, title insurance would protect everyone, the lender, the buyer, the seller, and even the closing attorney at a relatively nominal cost. The price of an attorney’s opinion (my opinion) would have to be commiserate with the liability directly assumed by the law firm through that letter. The very clear lesson was that I should issue title insurance, not opinion letters. And when a title opinion was demanded, I should charge a hefty fee for it.

I’ve taught law students and others that title insurance is the best choice for several reasons. First, attorneys are only responsible for their negligence, not hidden defects and mistakes in the public records. For example, I heard about a deed recorded in Greenville County where one person forged the signatures of eight individuals, including the witnesses and notary. Forgery is rarely evident on the face of the forged document. An attorney’s opinion of title would not cover that defect. Title insurance would. An attorney’s opinion would not cover a deed, mortgage, or set of restrictive covenants missed in a title examination because of mistaken indexing by a county employee. Title insurance would.

Second, attorneys die, move, are underinsured, allow their malpractice to expire and otherwise become unavailable when a title problem arises. Finally, statutes of limitations may come into play. Title insurance does not expire as long as the lender or owner has an interest in the property, including an interest arising from deed warranties. Title insurance shifts the risk of title defects from the property owner and lender, and, in a manner of speaking, from the closing attorney to a financially sound insurer.

Fannie Mae’s announcement said that acceptable opinion letters must come from properly licensed attorneys with malpractice insurance in an amount “commonly prevailing in the jurisdiction.” The letters must provide gap coverage. Every South Carolina title opinion I’ve seen takes a clear exception to matters arising after the date of the opinion. Fannie Mae will also require the letters to “state the title condition of the property is acceptable.” I’m not sure what that statement means, but I don’t believe I would give that unqualified opinion.

This news from Fannie May could be what politicians are calling a “nothing burger”. Freddie Mac issued a similar announcement two years ago, but that announcement has not had a major impact on the way lawyers and title insurers do business.

Let’s wait and see what happens. But, in the meantime, I don’t advise my friends who close real estate transactions to start issuing title opinions instead of title insurance.

Advice for purchaser clients: obtain a survey!

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Advice for lawyers: paper your file when clients refuse!

On this cold, wet Monday morning, I was wondering what I could write to help my real estate lawyer friends through a February week in South Carolina. Then I remembered this news article from the U.S. Sun an excellent dirt lawyer friend from the coast sent to me. His quote was: “I wish I could get all buyers to read it when they turn down a survey.” Perhaps you can use this article to convince a client or two.

Any of us who are old enough to have practiced in the 1990s will remember a time when lenders and title insurance companies required current surveys for every closing. A current survey is a great tool for a real estate lawyer to review along with the title work. Comparing the boundary lines with the title work and checking for easements, encroachments and such horrible mishaps as sewer lines running under improvements gave the lawyer and client a great deal of comfort.

Our backdoor neighbors were once Steve and Wendy Spitz. Many real estate lawyers in South Carolina attribute our knowledge and enthusiasm for the practice to Steve’s property classes in law school. We both built in a new subdivision, and a corner of the Spitz home, as revealed by a survey, sat squarely on a City of Columbia water easement. That builder’s mistake was corrected prior to closing by negotiating with the City to move the easement. Thankfully, the water line itself was not a problem.

To hold down closing costs, at some point in the 1990s lenders began to eliminate the requirement for a survey in most residential closings if the lender could obtain title insurance survey coverage. One of the title insurance companies agreed to provide survey coverage to lenders without a new survey. There were some requirements back then, like having a survey of record showing the improvements or having an affidavit from the owner that nothing had changed since the prior survey.

Then, for competitive reasons, all the title insurance companies caved. Current surveys were no longer required. Over the years, the requirements were even softened.

My thought was that the title companies had unceremoniously hung the lawyers out to dry. Previously, the closing attorney simply told the client that a survey was required to close. With the change, the closing attorney had to convince the client of the need for a survey despite the added cost. I believe one of the biggest traps for the unwary closing attorney is failing to advise purchaser clients to obtain surveys and failing to paper files when surveys are rejected.

And don’t even mention the surveyors! They were collectively and understandably furious that they had lost a large portion of their business. I remember being the sacrificial lamb who was sent to speak to a statewide group of surveyors on behalf of the title insurance industry. It wasn’t pretty.

Here’s another story from my neighborhood. A kindly preacher friend bought a house several doors down from us. The free-standing garage had been added prior to my friend’s purchase and well after the original construction. My friend did not obtain a current survey. When he sold the house, a new survey revealed that the garage violated the side setback line by more than ten feet, and the purchaser refused to close. Keep in mind that contracts typically require sellers to give marketable title. A setback violation of this magnitude may be insured over by a title insurance company, but the title may not be marketable. This purchaser was within his rights to reject this title.

By that time, the developer, a Greenville based insurance company, had sold all the lots, and took the position that it could no longer waive violations of the restrictions even though the restrictions clearly allowed for developer waivers. The solution was that my friend went door to door to obtain the signatures of the required majority of the owners. Thankfully, my friend was a very nice guy, and the neighbors were willing to accommodate his request by signing the waiver.

Today, title insurance policies have evolved to the point that survey coverage is often given to owners without current surveys. But the example above demonstrates that title insurance coverage may not cure the underlying problem. Title insurance can never create marketable title. And title insurance claims may take time and cause aggravation that clients will not appreciate.

So let your clients read the linked article and advise them to obtain surveys. And, if they refuse, obtain  informed consent confirmed in writing for your file!

Is “title theft” a thing?

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Can and should a consumer buy protection against title theft?

Several years ago, a real estate lawyer asked whether title insurance companies should offer protection against “title theft”…the protection touted by the companies who routinely advertise their services on the radio. This question prompted us to research the services of those companies and analyze whether title insurance companies should offer the same service.

The advertisers who bombard the airwaves with warnings about title theft say thieves can steal homes by forging the names of homeowners on deeds, then reselling or mortgaging the property to hijack the equity. The thieves would purportedly pocket the proceeds, leaving the homeowner without title or with new mortgage payments. The companies promise to monitor title to protect against such devastating losses.

My understanding of the product being offered at that time was that the company would regularly check the land records to see whether the homeowner’s name appeared on any deed or mortgage. The homeowner would be notified of any “hits”. If the homeowner responded to the notification that the instrument in question was, in fact, a forgery, then the company would prepare and file in the land records a document to alert future buyers and lenders of the forgery. I was told that the product did not include attorneys’ fees for clearing titles.

But is “title theft” a thing? Does a forged deed convey real estate? No! Does a forged mortgage require the true owner of the real estate to make payments? No! But can a forger wreak havoc for a property owner? Yes, indeed!

I’ll never forget the name, Matthew Cox or the telephone call that tipped us off that we had a serious mortgage fraud situation here in Columbia. Long before the housing bubble popped beginning in late 2007, an attorney called to let us know what was going on that day in the Richland County ROD office. Representatives of several closing offices were recording mortgages describing the same two residential properties in Blythewood, as if the properties had been refinanced multiple times in the same day by different closing offices.

At first, we thought our company and our attorney agent were in the clear because our mortgage got to record first. South Carolina is a race notice state and getting to record first matters. Later, we learned that deeds to the so-called borrower were forged, so there was no safety for anyone involved in this seedy scenario. Thousands of dollars were lost.

Next, we learned about the two fraudsters who had moved to Columbia from Florida through Atlanta to work their mischief here. The two names were Matthew Cox and Rebecca Hauck. We heard that Cox had been in the mortgage lending business in Florida, where he got into trouble for faking loan documents. He had the guts to write a novel about his antics when he lost his brokerage license and needed funds, but the novel was never published. With funds running low, Cox and his girlfriend, Hauck, moved to Atlanta and then Columbia to continue their mortgage fraud efforts.

We didn’t hear more from the pair until several years later, when we heard they had thankfully been arrested and sent to federal prison.

The crimes perpetuated by Cox and Hauck were made easier by the housing bubble itself. Housing values were inflated and appraisals were hard to nail down. And closings were occurring at a lightening pace. The title companies who had issued commitments and closing protection letters for the lenders were definitely “on the hook”. And the important thing about title insurance is that coverage includes attorneys’ fees for defending titles. I don’t believe the property owners in this case had any coverage but clearing the mortgage issues eventually cleared their title problems.

Would the title theft products have been valuable to the homeowners in this situation? The companies may have notified the owners of the forged deeds and may have filed some kind of notice of the forgery in the land records, but that is all they would have done. Nothing would have prevented the forged mortgages. I am now informed that, under some circumstances, attorneys’ fees to clear title may be included with the title theft products, so perhaps today, the owners would have some protection with a title theft product. These products require “subscriptions” and periodic payments.

A far better alternative is the coverage provided by the ALTA Homeowners Policy of Title Insurance which requires a one-time payment at closing. This is the policy we commonly call “enhanced” coverage. The cost of this policy is twenty percent higher than the traditional owner’s policy, but it includes protection for several events that may occur post-closing. Forgery is one of those events. And, again, title insurance coverage includes attorneys’ fees.

Dirt lawyers who are asked about the title theft products should advise their clients that they can check the land records, most of which are online, to discover whether anyone has “stolen” their titles. And, better yet, they can buy title insurance coverage for peace of mind.

Protracted litigation leads to noteworthy federal title insurance case

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Early in my legal career, I searched a title prior to contentious litigation surrounding a commercial tract in Horry County. I was eight months pregnant with my son at the time. Title examiners as old as I am will remember we used to pull huge books down from high shelves to search titles in South Carolina. I remember this project so well not because of the difficult work in my puffy condition, but because of the time it took to resolve the litigation. When we finally received the final order, my son was in the second grade.

That timing may not hold a candle to the case decided last year in The United States District Court for South Carolina surrounding a tract in Dorchester County. Dudek v. Commonwealth Land Title Insurance Company* is the culmination (I hope) of what the court calls a “long- standing and enduring legal battle” over an eight-acre tract that was divided into two parcels of six and two acres, respectively.

Summarizing the almost undisputed facts as briefly as possible, plaintiffs Stephen Dudek and Doreen Cross entered into a contract to purchase the six-acre tract in 2012. A third party, Molly Morphew, entered into a back-up contract with the sellers to purchase the property in the event the plaintiffs’ purchase fell through. Both parties ultimately sued the seller for specific performance, and the plaintiffs in this case prevailed.

Dudek and Cross purchased the property in 2017 and obtained a title insurance policy from Commonwealth. The litigation with Morphew continued with two subsequent suits, the first alleging fraud and abuse of process in the purchase, and the second seeking to enforce a contract provision setting up a water and sewer easement in favor of the two-acre tract, which by this time had been purchased by Morphew. Dudek and Cross filed a title insurance claim on the easement issue, and Commonwealth denied the claim relying on an exception for easements and the exclusion for risks created by or known to the insured prior the policy date.

I’m eliminating a lot of facts and procedural nuances that title insurance nerds like me will find fascinating, so pull the case for the long story.

The Court held Commonwealth had no duty to defend the insured property owners, relying on the fact that they knew about the easement before they closed. Simple enough, right?

The more convoluted and interesting discussion revolves around the treatment of the policy of the easement issue.  The covered risk in question in the policy was that “someone has an easement on the Land”. The policy contained two exceptions, however, one for unrecorded easements and one for recorded easements. The court stated that the policy simultaneously extended and eliminated coverage for easements, rendering the policy provision meaningless and illusory.

Title insurance agents routinely add specific exceptions to title insurance policies to limit coverage. This case cautions against adding exceptions that operate to prevent all coverage from a covered risk. We will all need to be careful about this holding as time progresses.

*466 F. Supp. 3d 610 (D.S.C. 2020)

ALTA’s Board approves revision to Best Practices

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Change would require ALTA ID

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The Board of Governors of American Land Title Association approved a motion on February 21 to revise the Title Insurance & Settlement Company Best Practices to include a requirement for companies to be listed in the ALTA Registry. The amendment is under a 30-day review period ending April 12. Comments may be sent to bestpractices@alta.org.

The proposed amendment to Pillar 1 of Best Practices includes the following requirement:

  • “Establish and maintain a unique ALTA Registry Universal ID (ALTA ID) using the ALTA Registry platform for each settlement office location (subject to those business entity types supported by the ALTA Registry).

ALTA, the national trade association of the land title insurance industry, formally launched the national ALTA Registry in 2017, allowing title insurance agents and settlement companies to communicate with underwriters to confirm their company name and contact information.

Using the ALTA Registry, lenders and their vendors are able to identify title agents, title underwriters and other participants in the closing process and communicate in a timely and consistent manner throughout the mortgage transaction.

Because there has been no unique ID number used across the industry to help match provider records in different databases, communication has often been difficult and costly for the title industry and its customers. This is especially important with new regulations driving vendor oversight requirements and the need for collaboration.

The ALTA Registry is a free, searchable online database of underwriter-confirmed title agent companies and underwriter direct offices. The registered information includes the title agent’s legal entity name, location and contact information. ALTA offers a unique 7-digit identifier, the ALTA ID, which is automatically assigned to each new database record as a permanent ID number and is never changed, reassigned or reused. ALTA ID numbers are available free of charge to title agents and real estate attorneys.

ALTA’s Best Practices is designed to assist lenders in managing third-party vendors. Pillar 1 requires title companies (closing attorneys in South Carolina) to maintain licenses for doing business in the title industry. This includes the license required by the South Carolina Department of Insurance and the ALTA policy forms license. The registry helps lenders determine they are working with legitimate title providers.

You learn something new every day!

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Question gives insight into IRS collection procedures against JTROS properties

In August of last year, an excellent South Carolina real estate lawyer raised this issue with Underwriting Counsel in our office:

The property owners are Sally Seller and Samuel Seller, as joint tenants with right of survivorship. Sally Seller died January 7, 2017. A federal tax lien was filed against Sally Single, Mrs. Seller’s maiden name, March 3, 2014. Mr. and Mrs. Seller were married in April 20, 2015. Please confirm that we should either pay off this lien at closing or obtain a release from the IRS.

Title insurance underwriting is all about pre-closing risk prevention and risk management, and I always joke that underwriting is more of an art than a science. This is true, in part, because few issues in the law are black and white. Most lawyers will confirm that a fair amount of gray area exists in most legal questions. But I digress.

The truth is that when a trusted, intelligent real estate lawyer calls her friendly South Carolina title insurance underwriter and says, in effect, “I should deal with this title problem at closing, shouldn’t I?”… that is an easy answer! Unless the Underwriter knows of a magic solution to eliminate the title issue, the friendly title insurance Underwriter will almost always respond, “Yes, please take care of that issue at closing.”  That’s exactly what our Underwriter did in this case last August.

Around Halloween, a follow-up question was raised:

The sellers’ attorney has been working on obtaining a satisfaction for the IRS lien, but the IRS has told him that the lien will not be released or satisfied because the taxpayer is deceased. IRS Agent Arnold Adams (IRS ID#10000797284)* referred me to Notice 2003-60. The IRS agent further said it will not file a release of lien for the convenience of title insurance companies and mortgage lenders**, but that the tax lien upon the death of a joint tenant is extinguished and not collectable on the basis of U.S. vs. Craft*** and its application.

The IRS notice linked above is entitled “Collection Issues Related to Entireties Property”. Every South Carolina dirt lawyer knows that we do not have a tenancy by the entirety form of ownership in South Carolina. If we don’t have that form of ownership, then does this IRS Notice have any application in South Carolina?

Married couples in South Carolina can own properties as tenants in common, joint tenants with right of survivorship or joint tenants with an indestructible right of survivorship under Smith v. Cutler.****

Several years ago, my friend and fellow South Carolina dirt lawyer, Paul Dillingham, called me to twist my arm to write an article with him for the Bar’s South Carolina Lawyer magazine, linked here, about a couple of deed drafting traps that were troubling him. In that article, we questioned whether Smith v. Cutler had created, in effect, a tenancy by the entirety form of ownership. That case dealt with property owned by couple pursuant to a deed with this language:

“for and during their joint lives and upon the death of either of them, then to the survivor of them, his or her heirs and assigns forever in fee simple”

The case held that property owned pursuant to the quoted language cannot be partitioned. If the property cannot be partitioned by the creditor of one owner, then the IRS Notice would have application in South Carolina. Apparently the IRS agent who was questioned for this closing believes the notice does apply in the Palmetto State, but please note that the question before the IRS agent didn’t deal with the Smith v. Cutler form of ownership. It dealt with a standard joint tenancy with the right of survivorship.

Did the IRS Agent give our South Carolina good advice? Would all IRS agents give the same advice? Can we ignore this IRS lien for the purposes of closing? What do you think?

* This is fictitious name and number. Don’t try to contact this IRS agent!

** That wasn’t very friendly!

*** 545 U.S. 274 (2002)

**** 366 S.C. 546, 623 S.E.2d 644 (2005)

Dirt Lawyers: Make sure you conform(a) with your pro forma policies

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Commercial real estate lawyers are routinely asked to issue pro forma title insurance policies. A friend who routinely acts as lenders’ counsel recently told me he sees lots of pro forma policies coming from borrowers’ counsel, and they are not being handled appropriately. For that reason, I thought I’d list a few reminders for all of us.

What is a pro forma policy? It is a sample policy provided to the customer and customer’s counsel in advance of closing. It outlines the actual language and format the final policy will contain, in the event the transaction actually closes and the policy is actually issued. A pro forma policy is not intended to serve as a promise to issue the final policy. And it is definitely not a substitute for a commitment.

One excellent process is to never send out a pro-forma policy independently. When I was in private practice, I issued a pro forma as an attachment to a letter which said, basically, “A policy in the form attached may be issued when the requirements in Commitment #_____, dated _____ have been satisfied.” My lenders’ counsel friend nails this matter down further by issuing the pro-forma policy as an attachment to the commitment with a note in the requirements section to the effect that upon satisfaction of all applicable requirements, a policy in the form set forth in Exhibit ___ will be issued.

A note to this effect be added to the policy:  “NOTE: This is a Pro Forma Policy. It does not reflect the present state of title and is not a commitment to insure the title or to issue any of the attached endorsements. Any such commitment must be an express written undertaking on appropriate forms.”

The pro-forma policy and all endorsements should be clearly marked “Pro-Forma Specimen” or “Sample” and should not be signed.  Many lawyers have a large “Specimen” stamp to use in these situations. My lenders’ counsel friend told me he actually stamps pro forma policies coming from borrowers’ counsel. Not all lenders’ counsel are that accommodating.

Where the policy date and policy number are requested on the form, supply the note “None”.

These rules are very simple and comply with common sense. A pro-forma policy is not a policy and should be clearly shown in every instance as a sample. Following these very straightforward rules will keep you and your title company out of trouble. And, as always, call you underwriter if you have questions or concerns!

New DOI rule: SC title insurance agents must be fingerprinted (Lawyers included!)

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Listen up, South Carolina dirt lawyers!

All title insurance agents must be fingerprinted for their next license renewals! The Department of Insurance has passed a new rule, effective January 1, 2017, requiring fingerprinting for all resident producers.

The DOI published a bulletin which you can read here. South Carolina Law Enforcement Division has established a contract with IdentoGo by MorphoTrust to handle the fingerprinting process. All title insurance agents will need to go to this company’s website, www.IdentoGo.com, to set up an appointment to be fingerprinted. Your zip code will be used to find the most convenient location.

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It is important that you do not wait until the month your license renews to begin this process. The bulletin advises that scheduling and processing may take up to ninety days. The cost for fingerprinting is $50.50.

Every lawyer’s first question is going to be, can’t they use my fingerprints from my Bar application?  The answer, we have been told verbally, is absolutely not. The DOI is emphatic that it will not accept fingerprinting from any other agency nor any other vendor. Every lawyer’s second question is going to be, does this apply to my staff members who are licensed agents?  It does.

Nonresident producers are not required to be fingerprinted.

As a reminder, licenses are renewed in your birth month. If you were born in an odd-numbered year, your next renewal will be in 2017.  If you were born in January or February of an odd-numbered year, you may be late if you haven’t already begun this process.  For those born in even-numbered years, you are safe until 2018.

Good luck!  Call your title insurance company if you have questions or need assistance.