February 2020
NOT JUST CAUTIOUSLY OPTIMISTIC


We used to say we were cautiously optimistic when the question was “How is business?” Lately, “Not just cautiously optimistic” is what we have heard ourselves saying. Has anyone heard anything different about the housing market? See what we mean?

We could just quote Fannie Mae’s chief economist, Doug Duncan, who was recently quoted in a Washington Post article:

  • Housing appears poised to take a leading role in real GDP growth over the forecast horizon for the first time in years, further bolstering our modest-but-solid growth forecasts through 2021.

  • In our view, residential fixed investment is likely to benefit from ongoing strength in the labor markets and consumer spending, in addition to the low interest rate environment. Risks to growth have lessened of late, as a “Phase One” U.S.-China trade deal appears to be in place and global growth seems likely to reverse course and accelerate in 2020.

Or we could point to the fact that Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency have announced that the maximum conforming loan limits have been increased from the 2019 limit of $484,350 to $510,400 for 2020, the fourth straight year of increases after no increases for an entire decade, from 2006 to 2016. HousingWire reports strengthening housing prices, with data from the FHFA showing increases of 5.38% on average between the third quarter of 2018 and the third quarter of 2019, resulting in the baseline maximum conforming loan limit in 2020 increasing by the same percentage.

Add to that the announcement that mortgage lending just had its biggest quarter in 14 years, with the Federal Reserve Bank of New York stating that an increase in refis is likely, and it’s pretty easy to figure out why so many people in the title insurance and real estate industries are smiling. It’s good to be in a good market!  

FROM THE TRENCHES

The agent was bewildered when she called with this one. The lender told her that the UCC for solar panels had to be terminated or subordinated, but the solar panel company refused to provide anything. “What do I do now?” she asked, with the borrowers sitting in the next room.

We all know that Uniform Commercial Code [UCC] filings perfect a security interest in personal property, and we see them regularly where a UCC financing statement is filed as additional security for a debt secured by a mortgage. When that happens, the lender’s security interest extends to things like inventory, business equipment, accounts receivable, and intangible assets. They may also be filed against property such as replacement windows, kitchen cabinets, boiler installations, propane tanks, and yes, solar panels. For these sorts of filings, the question becomes whether we are dealing with personal property that has become a part of the land.

A fixture is an item of personal property which is attached or affixed to land in a way that the personal property is considered to be a part of the realty. Crops and timber are easy. They are regarded as personal property, but they are attached to the land. The other examples above constitute integral components of the improvements on the land. They are a part of the home. If they were to be removed, the value of the mortgage security might be diminished. Since the UCC filing could enjoy priority over an insured mortgage interest, an exception is to be taken.

But many solar panel filings say on their face that the panels are not fixtures or part of the real estate. We have seen some that say that they do not have any priority over subsequent mortgages and that they will not provide subordinations. They take the position that the panels are not permanent installations. If the homeowners default on their solar panel agreement, the company will merely remove the equipment. 

While title underwriters may vary on their requirements and exceptions concerning UCCs for solar panels, the agent calling on this one was very happy with CATIC’s advice which resulted in the lender funding without further delay.  
Outstanding Checks?


A lot of folks have them. Still unnegotiated, still uncashed. Or maybe it’s an old escrow. You know what file it’s for and why you held it, but no one will respond to your follow-ups, and the mail to the owner of the funds was returned by the post office marked “Undeliverable.” Should you be the title agent or attorney who finds these circumstances familiar, it may be time to think about the New Jersey Uniform Unclaimed Property Act.

Under the terms of N.J.S.A. 46:30B-1, et seq., the holder of property such as an escrow or someone else’s funds may be required to escheat the property to the state of New Jersey. The law applies to funds that remain unclaimed for a period of three (3) years after they became “payable or distributable.” For an outstanding check, the three years would run from the date of disbursement. For an escrow, the three-year period would begin once the purpose of the escrow was resolved, such as the expiration of a judgment, discharge of a mortgage, payment of taxes or municipal liens, or resolution of the claim for which the escrow was originally held. 

Best practices would include maintaining reliable forwarding addresses for parties or escrow fund depositors, and diligently reminding them to advise you should they relocate. Reasonable efforts to return unclaimed funds must be made before you address the escheat process. 

The New Jersey Department of the Treasury, Unclaimed Property Administration maintains a website with instructions, forms, and procedures, along with State contact information and FAQs. If you have unnegotiated checks or escrow funds to return and three years have passed and a reasonable effort to return the funds to the owner has been made without success, it may be time for the funds to be escheated to the State. 

Services such as CATIC’s UCPExpress can assist with Unclaimed Property Services nationwide. For New Jersey specific questions, please contact the state office.


Valentine’s Wishes


We aren’t really sure why mid-February is the time for us to tell our CATIC Agents and friends how much we love them and appreciate their support and partnership all year long. Some say the ancient Romans had something to do with choosing this time of year by scheduling a holiday called Lupercalia on their calendar. The holiday, which celebrated the coming of spring, also celebrated fertility and was said to include a ritual in which men and women were paired off by choosing names from a jar.

Thankfully, we have progressed to the point where February 14 th is now celebrated as a romantic holiday, but kudos to those ancient Romans who got us started on the right path! 

Want to read more about those Romans getting us pointed in the right direction? Check out this article written by our own New Jersey Counsel.

CATIC’s Municipal Guide Now Covers New Jersey!

We are pleased to announce that our Municipal Guide Mobile App now covers New Jersey. Our mobile app provides municipal information for every city and town in Connecticut, Florida, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont, and now New Jersey too!

Use your Apple or Android phone or tablet, and download your free Municipal Guide App from the iTunes Store or on Google Play. Search for “CATIC Municipal Guide.”
About The CATIC Title Courier

The CATIC Title Courier is published 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 CATIC Title friends.  You are receiving this newsletter because we believe you fall into one of these categories. 

We hope you enjoy the February 2020 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!