Volume 1 Issue 5| July 2019
Executive Order = Great News for Housing!

On June 25 th , the landscape changed for the future of American housing with the signing of an Executive Order by the President. Establishing a White House Council on Eliminating Barriers to Affordable Housing Development, the Executive Order’s highlights include removing regulatory obstacles that impede development and drive up housing costs. With more than 25% of the cost of a new home directly tied to federal, state, and local regulations, and only seven homes being built for every ten households formed from 2010-2016 based on Census Bureau data, this White House initiative is great news for home ownership and brings benefits for the real estate industry.

“We’re lifting up forgotten communities, creating exciting new opportunities, and helping every American find their path to the American Dream.” President Donald J. Trump

The need for creative housing solutions is clear and the question of how we get to expanding affordable housing has to be answered. A recent study by the Harvard University “Joint Center for Housing Studies” addressed the short supply of available housing that is driving up costs and moving home ownership out of reach. “If current housing supply trends persist, house prices and rents will continue to rise at a healthy clip, further limiting the housing options for many,” the report says.

The Executive Order addresses the very concerns raised by the Harvard study and proposes solutions through the implementation of interagency processes intended to cut red tape and deliver results. The Council will be chaired by the Secretary of Housing and Urban Development and includes members from eight federal agencies, including Treasury, Interior, Agriculture, Labor, Transportation, Energy, Environmental Protection, and the Office of Management and Budget. 

HousingWire reports a highly favorable response to the Executive Order from both the National Association of Home Builders and the National Association of Realtors. It goes without saying that what benefits builders and Realtors will also benefit the title insurance industry. We at CATIC Title are excited about the enhanced opportunity to support all real estate professionals engaged in the process.  


Judge Rules Against Three-Day Attorney Review
In a decision of interest to NJ real estate professionals, NJ Superior Court Judge Fred Kumpf of Somerset County ruled against the application of the long-standing three-day attorney review period in this June 26 th unpublished opinion . Word is that an appeal is coming.

Since the time of the NJ Supreme Court decision in NJ State Bar Ass'n v. NJ Ass'n of Realtor Bds. , 93 N.J. 470 (1983), real estate brokers have been permitted to prepare sales contracts provided they included a provision allowing the parties three days to consult with an attorney and cancel the contract. The 1983 decision resolved the bar association claim that real estate brokers who prepared contracts were engaged in the unauthorized practice of law. The decision raising conditions upon the three-day attorney review as mandated by the NJ Supreme Court is of first impression in New Jersey.

Judge Kumpf held that the attorney review clause need not be included in the sales contract for a buyer of property at an auction who receives the contract terms in advance and has sufficient time to seek attorney review. The judge rejected the purchaser’s claims that the contract should be voided due to her limited grasp of English and her assertion that her husband signed her name to various paperwork. The ruling resulted in the loss of the buyer’s $121,000 deposit in this breach of contract action. 

This trial court decision is of interest as it could be viewed as eroding the consumer protections imposed on the real estate community in the decisions defining the unauthorized practice of law in NJ, including the seminal 1995 decision In Re Opinion 26 . CATIC Title encourages and supports attorney involvement in the real estate process, and we will monitor and report on any further developments that have an impact upon real estate professionals.
From the Trenches: Marital Rights A Title Top Ten  
  
The question we heard more than once this month concerns the marital right of joint possession, which is a creature of statute in NJ. “Refinance of the principal marital residence,” we are told. Husband bought the house in his own name when he moved to NJ from Norway with his wife. “She left him two years ago and moved back home. There is no way she will agree to sign anything, even if the borrower can find her. Can we still close? ”

The law that applies here is NJSA 3B:28-3 and that law is clear: Every married person is entitled to joint possession with his or her spouse of any real property jointly occupied as their principal matrimonial residence. The law goes on to say that if a marital right of possession exists and has not been extinguished, any interest acquired by a third party is subject to that spouse’s marital right to live in the home. In the scenario above, if the wife still lived in the home, the resolution would be simple: she would join in signing the mortgage, but she is gone and unavailable to sign anything.

There is a lot of confusion when title agents encounter a marital rights question because of relatively recent changes in the law. The current statute became effective in 2005 after enactment in 2004. The old law was far more stringent on requirements to terminate marital rights, leading to a long-standing impression that the spouse must sign off to extinguish those rights, but that is no longer the case. NJSA 3B:28-3(c) now lists requirements to terminate the joint right of possession that are a lot easier to comply with.

The right of possession may now be extinguished by the consent of both parties; by the death of either spouse; by judgment of divorce, separation or annulment; by other order or judgment; or by voluntary abandonment of the principal matrimonial residence. That last part about abandoning the marital residence applies to the situation described by our caller. All we need here is language in the borrower’s affidavit of title that confirms that the spouse moved out two years ago, and we can then insure the new loan without exception for the spouse’s right of possession.

The same marital right of possession would also apply to a civil union in New Jersey after the signing of a civil union law by Governor Corzine in February of 2007. That law now provides that parties to a civil union have all of the same benefits, protections, and property rights as spouses in a marriage. Any title issues involving parties to a civil union are addressed and underwritten in the same manner as if the parties were married. 
CATIC Title Welcomes Approved Attorneys!

We may be new to New Jersey, but CATIC has been working with attorneys and real estate professionals since 1966 with the founding of Connecticut Attorneys Title Insurance Company, a Bar-Related ® title insurance underwriter in the New England States. As a Bar-Related title company, CATIC Title honors, fosters, and always seeks to enable attorney and real estate professional involvement in the real estate process. For New Jersey, that means getting our attorneys approved to fund transactions before the lender requests the Closing Protection Letter.

The process is simple. Any agent who works with an attorney as a Settlement Service Provider can request attorney approval by completing a simple form . Attorneys can also submit their office information and request approval . A copy of the declaration page of the attorney’s liability insurance is the only formal requirement. Please visit the Approved Attorney page on our website for more information.
About The CATIC Title Courier

The CATIC Title Courier is published monthly by the New Jersey State Office of CATIC Title Insurance Company. The Courier is intended to provide interesting, relevant, and informative articles and information to our agents, attorneys, agent prospects, industry partners, and our other CATIC Title friends. You are receiving this monthly newsletter because we believe you fall into one of these categories. CATIC Title agents who wish to add their attorney applicants or others in their offices to our list of recipients should send an e-mail request to [email protected] . Reading the CATIC Title Courier every month will also keep you informed on the scheduling of educational seminars for CLE and CE credit.

We may be new to New Jersey, but with more than 100 years of experience among us, we know a lot about what is important to title and real estate professionals. You can rely on the CATIC Title Courier for monthly updates on changes in the law, court decisions of interest, NJDOBI news and Rate Manual or form changes, interesting underwriting issues, and articles that give you something to think about, like our NJ State Counsel’s article, Title Insurance Saves The World , in the NJLTA Summer Edition of The Advocate. 

We hope you enjoy the July 2019 edition of the CATIC Title Courier: Different news and information from a different kind of title underwriter. Comments, feedback, or suggestions for future content are welcome! See what full-time title agent and attorney support looks like!