6C — October 22 - November 18, 2021 — Insurance/Title — Owners, Developers & Managers — M id A tlantic Real Estate Journal
I nsurance /T itle
By William J. Parker, Conestoga Title Insurance Co. Lien Priority Always Be The “Firstest With The Mostest”
whether any judgment liens and/or mortgages have been recorded which would effect the first lien position of the insured Mortgage. 4. If there are any such recordings discovered in the pre-recording “bring-down” search, they need to be ad- dressed immediately. While this may delay the closing or disbursement of funds, we should not proceed with settlement or issue a policy until the intervening recorded document is removed from its priority position or released by the mortgage holder or judg- ment creditor. 5. If an earlier Mortgage is found, it needs to be subordi- nated to the Mortgage which you are placing on record. If a judgment lien is found, then it needs to be paid and satisfied or properly released of record. 6. If, however, your bring- down search turns up recorded documents which are not clear that they relate to the parties at the settlement table (the Seller, the Buyer, the Lender), contact your title insurance underwriter for advice. Then document the same for your file for future reference so that if this is brought to light in the future, you can easily address the issue. 7. If you are recording a first Mortgage and second Mort- gage, please ascertain and confirm that the correct re- cording order is followed. It is critical that these be recorded properly for lien position. The best way to insure this is to never allow a second mortgage to leave your possession after closing until you verify the first mortgage was recorded. 8. If you are conducting a purchase transaction and filing electronically, please ascertain and confirm that the deed is placed on record before the mortgage. Again, it is critical that these documents be record- ed properly for the validity of the mortgage and lien position. If you have any questions about the priority of your docu- ments, please contact your title insurance underwriter before proceeding. William J. Parker, VP Claims & Underwriting with Conestoga Title Insur- ance Co., has recently been appointed as a Certified Land Title Professional (CLTP) by the Pennsylva- nia Land Title Association (PLTA). MAREJ
any times in title insurance under- writing we receive
However if you remember the clock starts ticking on prior- ity issues before settlement! One rule to remember about priority in every jurisdiction however is First in Time, First in Right. Here is one example: The purchase settlement oc- curred on September 23, 2019; however, the documents were not recorded until October 7, 2019, fourteen days later. A judgment lien or Mortgage/ DOT was filed against the seller on September 25, 2009. In this example , the lien attaches to the property even
though the conveyance was completed because the docu- ments were not recorded until October 7, 2019. Hopefully this scenario does not happen to you but to pre- vent it from happening here are some PRACTICAL TIPS that if you are not already implementing, you should. 1. If your preliminary title search discloses outstanding mortgages and you have in- formation that they have been paid, please either obtain a satisfaction piece or a letter of indemnification from the prior underwriter BEFORE going
to settlement. 2. If judgment liens appear on your preliminary search and you are unclear as to whether they attach to a buy- er and/or seller, please contact your title insurance under- writer to clarify before you go to settlement. ALL mort- gages and judgments should be properly documented or resolved prior to settlement. 3. Before settlement, the judgment dockets and mort- gage indices should be checked (bring-down) from the cover date of the search in your title underwriting file to determine
i n q u i r i e s from agents, r e g a r d i n g when judg- ments and/ or liens may attach to a p r o p e r t y . Unfortunate- ly, there are
William J. Parker
different bright line rules for the principles of lien priority for different liens in every jurisdiction. That could be the topic of several volumes.
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