Bulletin: WA2013001

Date:
November 13, 2013
To:
All Washington Issuing Offices
RE:
LEGISLATIVE UPDATES - Washington State Legislative Update

Dear Associates:

The 2013 session of the Washington legislature produced four bills of significance to the title insurance business. SHB 1435 may be described as the most beneficial of the four. SHB 1435 provides a new alternative means for removing the lien of a deed of trust when the underlying debt has been paid.

HB 1035
Effective date 7/28/2013

This statute requires the Insurance Commissioner to designate a neutral "statistical reporting agent" to act for the Commissioner to gather information about title company income and expenses. Thereafter, by May 31 of future years, each title insurer and title company agent will provide information to the statistical reporting agent. Then that company will compile the information to present a confidential report to the Commissioner. The Commissioner will thereafter utilize that report to analyze requests by title insurance companies for approval of title insurance rates.

SHB 1435
Effective date 7/28/2013

This Bill amends a statute to provide additional procedures to ensure the release of a Deed of Trust after it has been paid in full. RCW 61.16.030 is unchanged that the Beneficiary has 60 days after receipt of payoff to complete the Deed of Reconveyance. The first new alternative is provided by expanding RCW 61.24.110(2). After the initial 60 days, if the reconveyance is not done, an escrow agent that paid the indebtedness pursuant to a payoff demand is authorized to request the Trustee of that Deed of Trust to sign and record the Deed of Reconveyance. The second new alternative is provided by RCW 61.24.110(3). If the Beneficiary and the Trustee have not acted 120 days after the payoff, that escrow agent may record a Declaration of Payment and give notice to the Beneficiary and the Trustee. If no Notice of Objection is recorded within 60 days from the Declaration of Payment, then the lien of the Deed of Trust expires. The new escrow agent authority applies to attorneys, title companies and independent escrow companies in Washington and becomes effective as of July 28, 2013.

SB 5541
Effective date 7/28/2013

This statute allows a prior lender to redeem after the judicial foreclosure of a homeowner's association lien. Due to the super-priority given by RCW 64.34.364 to HOA liens, the prior mortgage lien is junior to the homeowner's association lien for six-months of prior assessments. This reverses the Summerhill decision [166 Wn.App. 625 (2012)] that denied redemption by the lender because its lien was not subsequent in time. As of July 28, the statute will allow redemption by parties subsequent in lien priority.

SHB 1034
Effective date 7/28/2013

This statute changes the definitions of escrow to include post-closing collection and processing of real estate contract payments. Companies that handle such collections are required to be licensed as escrow agents under the Escrow Agent Registration Act. It also increases the fidelity bond requirement for independent escrow agents licensed by DFI from $250,000 to $1 million.

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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None