Wednesday, August 28, 2013

SEEKING YOUR THOUGHTS: HAVE YOU BEEN REQUIRED TO PROVIDE ADDITIONAL OPINION LETTERS IN CONDO CLOSINGS?


Have you been required of to provide an attorney’s opinion letter to residential mortgagees,  for their benefit and the benefit of FNMA, in relation to a closing on a residential condominium unit certifying as to various provisions contained in the condo documents and all amendments thereto and further:

That  you are familiar with all laws, ordinances, regulations and other legal requirements which were applicable with the respect to the establishment and administration of the condominium in the jurisdiction and locality where the unit  is located;

None of the amenities or facilities, including any recreational or parking facility, related to or associated with the condominium are, or are proposed to be, leased to the Owners Association or unit owners. None such amenities or facilities will be subject to any restriction or reservation in favor of the developer or declarant of the condominium or any affiliate of such developer or declarant, as the term “affiliate” is used in Section 803.08 of the FNMA Conventional Home Mortgage Selling Contract Supplement; and  

The project documents may provide for implied approval to be assumed when a mortgagee fails to submit a response to any written proposal for an amendment within sixty (60) days after it receives proper notice of the proposal, provided the notice was delivered by certified or registered mail, with a return receipt requested. Notwithstanding the foregoing, project documents that were recorded prior to August 23, 2007, may provide for implied approval to be assumed when a mortgagee fails to submit a response to any written proposal for an amendment within 30 days after it receives proper notice of the proposal, provided the notice was delivered by certified or registered mail, with a return receipt requested.

Have you been required to provide the opinion letter at no additional charge above and beyond your capped fee for the title exam, review of the title exam, title certification, coordination of the closing, performing the closing, acting as settlement agent, recording the documents and disbursing funds?

Are you familiar with ALL laws, ordinances, regulations and other legal requirements which were applicable with the respect to the establishment and administration of the condominium?

Have you examined Section 803.08 of the FNMA Conventional Home Mortgage Selling Contract Supplement?

Have you been able to examine the condo docs and all amendments to be in a position to provide a legal opinion on the above types of questions (ie an “implied approval to be assumed when a mortgagee fails to submit a response to any written proposal for an amendment…”)?

I am interested if you have. I have talked with some small firms who are now moving away from performing residential closings because they see a trend where lenders are shifting the burden of compliance with federal regulations to the closing attorneys.  The attorneys fear that if the borrower defaults and the loan reverts back to the lender under the new rules the lender will seek a remedy from the closing attorney. Your thoughts?

PAUL F. ALPHEN, ESQUIRE

BALAS, ALPHEN & SANTOS, P.C.


 

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