Q. I have a guy calling about getting an additional insured endorsement for his policy as he has deeded into his trust. My company issued to him an ALTA Homeowner’s Policy. When I looked the policy it states under the continuation of coverages section includes “the trustee or successor trustee of a Trust to whom You transfer Your Title after the Policy Date; or”… So, I don’t think he needs to have the endorsement, correct? If he still insists, should I go ahead and sell him one?
A. I agree with you that it is unnecessary. The Homeowners Policy of Title Insurance just like the 2006 policies allows for the coverage to continue if the individual deeds the property into his personal trust. In prior types of title policies the title insurance could conceivably terminate when deeding into a trust. That’s because the old policies did not recognize that transfer as an exception to the termination clause of the policy that says the policy stays in effect so long as you hold an interesting the property or give warranties to another. With that said, if he wants one, I would acquiesce since the endorsement is relatively easy (and inexpensive) and if it makes the insured happy, that’s a good thing. I have had many who request this endorsement knowing it is unnecessary form a title insurance perspective but want it anyway. But if he wants the effective date of the title policy brought to the current date, then that would be another story as that is much more expensive.

Q. I have a file that is a refinance. The vesting deed was deeded as Mary, wife of John to John, husband of Mary. The deed does not state anything about sole and separate property. Guess what? They’re now divorced. Are we needing to file another deed from Mary to remove her spousal interest or can record the divorce decree to take care of it?
A. The answer to your question depends upon what is in the divorce decree. Perhaps the decree will explain this issue away. Obtain a copy of it and take a look to see what it says. It may say that the property is intended to be the husband’s. If it does, so long as there are no other adverse things in the decree (judgments/liens, etc.) and has the correct language describing the property, recording may do the trick for you. Keep in mind, if you record it, make sure there is no non-public information like social security or credit card numbers in it as the Recorder’s office will most likely reject it for privacy reasons.

Q. Could I get your opinion on something? We did an exhaustive search to get a deed of trust released but were unable to find anyone to release it. The lender no longer exists and the gentleman who ran it is nowhere to be found. The Secretary of State lists an attorney as the agent for the company but when he was reached he said he had no idea where he was. He would not do a release himself. We also contacted the trustee named in the deed of trust, but they also would not do a release without direction from the lender. The loan was part of a down payment assistance program where an incidental loan is put on the property. The borrower quickly paid back, so quickly that he says he no longer has any documentation on it. We have told our borrower to go to court to get this released, but I’m sure that will be time consuming and naturally they are trying to close quickly. Do you have any other suggestions? Can we insure over this deed of trust since we exhausted all avenues to get a release and are kind of at a dead end? The loan amount was only for a few thousand dollars. Any ideas?
A. He’ll have to come up with some proof that it was paid. Perhaps cancelled checks on microfilm with his bank perhaps. Sometimes an underwriter will insure over the enforcement or attempted enforcement over such a matter if there is adequate proof of payoff together with some evidence and indemnifications from the borrower. Without anything at all, I would say no. Have him try harder to find the evidence you need.

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Copyright, John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.