CLTA News Express
An Express Article from the California Land Title Association
CLTA Takes the Lead in Sidelining Bill Requiring Riders on Deeds of Trust
Bulletin 09/10-4 - July 1, 2009
A coalition led by the CLTA has temporarily sidelined a bill that would have required the attachment of a rider to deeds of trust. The rider would contain a laundry list of real estate professionals involved in the transaction; without it, the county recorder would be prohibited from accepting the deeds of trust for recordation. AB 919 (Nava) had already passed the Assembly but now, as a 2-year bill, will not be considered in the Senate until next year.
Although the purpose of this bill was to discourage fraud and to create a paper trail for enforcement action, the CLTA argued that AB 919 would have the unintended consequence of making it easier to commit fraud by creating a list of real estate providers with their license numbers in each and every loan transaction.
The CLTA led the opposition, which included the California Escrow Association, the California Bankers Association, the California Mortgage Bankers Association, the California Association of Realtors, and other lender groups, in asserting that voiding a loan is poor public policy and would have a significant chilling effect on the availability and cost of real estate loans in California. The bill is ambiguous as to who is ultimately responsible for its completion. If history is any indication, this responsibility would unfortunately fall onto the shoulders of escrow and title professionals who already are being compelled to go beyond traditional duties to close consumer real estate transactions.
Adding this new burden to the recording process for loans would translate into title and escrow personnel having to track down riders, get names and license numbers, verify those names and license numbers, and ensure that that rider is then attached to the deed of trust for recording. The potential increase in costs to consumers and possible delay in recording transactions would clearly not benefit consumers.
The CLTA will continue to be in the forefront of the opposition to the current version of AB 919, and take an active role in getting other interested groups to join with the CLTA in evaluating the impact of any proposed changes.
