Various proposed changes to the Administrative Code were considered at a meeting
held on December 1, 1994, in Tallahassee. Subsequent modifications to the proposal
were recently published and the result will become effective February 13, 1995.
The following is a summary of the most important changes.
Subparagraph 3 has been modified to provide that the reissue rate will apply
to any resale or refinance within twelve months of a sale. The determining
factor will be that the new policy have an effective date of less than one
year after the effective date of the prior policy provided a previous owners
policy was issued.
Subparagraph 11 (a) and (b) have been modified to clarify that the 30% of
premium to be paid to the underwriter also applies to the risk premium for
endorsements and shall not be decreased by providing services to the agent
for less than actual cost.
Subparagraph 11 (c) has been modified to provide that the underwriter portion
of the premium must now be remitted by the agent to the underwriter at least
monthly and should remain in the agent's escrow/trust account until remitted.
Subparagraph 13 (a) has been amended to provide that charges for searches
and examinations and closing charges must be charged for at least actual cost.
The former reference to fair market value has been deleted.
Subparagraph 13 (b) has been modified to provide that the charges for related
title services (search and examination and closing) shall be shown separately
on the closing statement and, further, that the adopted risk premium shall
be shown separately. See suggested draft of completed HUD-1 attached.
Subparagraph 13 (c) has been amended to provide that charges for title searches
and examinations must be billed and collected within sixty days of closing
or within ninety days of furnishing such services if there has been no closing.
Subparagraph 13 (d) has been amended to provide that any ongoing or standing
offer of gifts, compensation or special services to referring title insurance
transactions is prohibited to the same person or customer on a continuing basis
as an inducement to referring real estate closing transactions is prohibited.
Subparagraph 6 (a) has been modified to include the ALTA 4.1 and 5.1 endorsements
(Condominiums and Planned Unit Developments).
Subparagraph 6 (b) (Revolving Credit Endorsement) has been modified to provide
for "ther government liens along with real estate taxes and assessments".
The paragraph dealing with bankruptcies will now relate to bankruptcies of
the mortgagor or their successors in title. The endorsement will be reprinted
and you may use the old endorsement until the new one is made available.
Subparagraph 8 (a) (Florida Form 9) has been modified to provide the following: "(5)
There are no notices or violations of covenants, conditions and restrictions
related to environmental protection recorded or filed in the public record." The
endorsement will be reprinted and you may use the old endorsement until the
new one is made available.
Subparagraph 13 (Substitution Loan Rate) has been modified as follows:
Subparagraph (b) dealing with changes in the interest rate will now read: "Any
decrease in the interest rate of the insured mortgage provided the 'cap' on
the variable rate mortgage is not greater than the original 'cap' and/or
the 'cap' is not greater than the original fixed rate."
Paragraph (c) is added as follows: "Any increase in the interest rate
of the insured mortgage provided the endorsement contains an exception for
the loss of priority occasioned by the increase."
Paragraph (d) is added as follows: "Changes in an amortization schedule
to extend the term of the insured mortgage."
Paragraph (g) is added as follows: "Future advancements made pursuant
to section 697.04, Florida Statutes."
Paragraph (h) is added as follows: "Encumbrances of additional parcels
under a revolving construction loan agreement contained in the original mortgage
and contemplated by 4-186.003(10)".
186.008 is modified to hopefully further clarify that drafts are not acceptable
as collected funds.
186.011 is modified to require that a title insurance commitment shall be
issued on all real estate closings when a policy is to be issued except when
multiple conveyances on the same property such as timesharing are being insured.
Also, no owner or loan policy can include exceptions not shown on the commitment
or approved by the insured prior to the closing. Further, a gap exception may
not be deleted on a commitment until the time of closing.
186.012 now provides that in order for a title insurance policy to be issued,
the search must have been completed either by an employee of an underwriter
or an employee of an agency or if done by an independent abstractor, that independent
abstractor must have an errors and omissions policy and with a minimum coverage
of $250,000 and a deductible no greater than $10,000.
186.013 dealing with statistical gathering has been expanded and clarified.
186.014 now provides that every title agent exempt from licensing (attorney
agents) must have their identity reported to the department although they continue
to be exempt from licensing.