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Source of Title Blog

New No-No's In Ohio
by Robert Franco | 2009/07/02 |

This month in Ohio, House Bill 525 went into effect requiring very strict formatting on documents to be recorded in the recorders' offices across the state.    Any document that does not conform will be be accepted ONLY if an additional $20 recording fee is paid.  It seems, like many well-intentioned laws, this one too will come with some unexpected consequences.  There are several common practices that may end up costing title companies lots of extra money if they aren't very careful. 

Source of Title Blog ::

Basically, the new requirements consist of the following:

  • Computer font size of at least 10 point;
  • Minimum paper size - 8 1/2 X 11, Maximum paper size - 8 1/2 X 14;
  • Black or Blue Ink ONLY;
  • No use of highlighting;
  • Margins of 1 inch on each side of the page and on the bottom;
  • 3 inch margin on the top of the first page, reserved for recorder, auditor, & engineer;
  • 1 1/2 inch margin on the top of each of the remaining pages.

It appears as though these requirements are going to be strictly enforced.  It is not sufficient that the printed document conform to the standards; there can be nothing in those margins at all.  Here are a few examples of things that might subject the recording to the additional $25 filing fee that some people may not have considered.

  • The title company's "return to" stamp that lets the county know where to return the recorded document.  These stamps are often placed in the margins.
  • The title company's order number.  Many title companies place their order number on the documents so they can easily locate the corresponding file when the document is returned.
  • The borrower's initials on mortgages.  These are often located in the lower right hand corner of the document in the margin.
  • The notary's stamp.  It may be difficult to place the notary seal far enough into the document to avoid the margins if you are using the crimping-style seal.

These are a few examples of things that may not be thought of when you are examining the documents to see if they meet the requirements of H.B. 525.  It would be easy to overlook any of them.

My personal opinion is that this literal interpretation of H.B. 525 is ridiculous.  If these markings do not interfere with the county's ability to place their stamps on the document it should not be an issue.  I would even go further to say that H.B. 525 was completely unnecessary!  If there was not enough room on the document for the stamp, the county could have easily just attached a blank page for their recording stamps - at a cost of $8 for the additional page, rather than the statutory fee of $25 for non-conforming documents.  But, common sense is not a commodity found in our legislature. 

The title companies should be aware of the new requirements and any documents that they prepare can be made to conform.  However, there are many documents that the title companies do not prepare and they are stuck with what they get from the lender, or the parties themselves.  This additional $25 fee will be a trap for those parties who attempt to prepare their own documents who don't have regular contact with the county offices. 

Non-real estate attorneys who prepare documents that may need to be recorded eventually may be a source of non-conforming documents.  Those who prepare trust documents, powers of attorney, affidavits, etc., will hopefully be prepared for these changes.  Contractors who prepare their own mechanic's liens will also likely find themselves subjected to the higher fees.

This is another product of the modernization of our county offices.  The old stamps were easy to place on the documents where ever there was room.  Today, however, the computers that print the information limit the locations where it can be placed.  Unfortunately, we seem to be subjected to new regulations to accommodate technology, rather than technology being developed to accommodate our needs. 

It will take some time for the industry to adjust to H.B. 525.  Closely review your documents and be mindful of where you place your own stamps and where the document is being executed.  Let's all try prevent rewarding the county with additional fees for burdening us with needless legislation.

Robert A. Franco
SOURCE OF TITLE




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Categories: Abstractors, Notaries Public, Ohio Legislation, Public Records, Small Agents, Title Industry

994 words | 4391 views | 4 comments | log in or register to post a comment


Track Record in PA

We have already had this happen to PA to some extent.  At least the legislature in Ohio had the good taste to pass a statute first authorizing these rules.  Here, some of the recorders decided to implement these standards on their own and took an "oh yeah, what are you going to do about it" approach when the complaints came in from title companies that they didn't have the authority to do this under state law.

I think these new Ohio standards are based on the PRIA standards which are fairly common nationwide.  Those standards call for the document preparer and "return to" information to be within that top margin on the first page, so I'm not sure why the Ohio law doesn't have that as well.

Our experience started in Philadelphia where the Recorder worked with several title companies and law firms to implement these standards around 2000.  There may have been a city ordinance allowing this, but I'm not sure.  After that initial success in Philly, some recorders in some of the larger counties went ahead and announced standards and fines without any change in state law giving them the authority to do so.  Each of these counties also had there own incarnation of these "standards" which of course meant that they weren't really standards.

The long and short of it is that this became a bit of a painful experience for the first year or two because it was nearly impossible to get many lenders to adjust their forms to the new standards.  Somtimes adding a cover sheet to the mortgage to make the first page conform to the standards helped to get around this problem.  This problem with lender forms hung up several settlements (or resulted in additional recording fees) when it was realized that the package received shortly before settlement did not follow the standards.  Most title companies were otherwise able to adjuster their own forms quickly and did not have too many problems with the new rules.  Despite the protests from the recorders that these standards were essential to allow recording with their new digital systems, they somehow found a way to record forms from the state and federal government (like commissions from elected officials) that did not conform without imposing any fines or getting them to "fix" their forms.

What they need to do is give everyone a six month to a year grace period to get used to the standards and give lenders and others sufficient time to adjust their forms.

 
by David Jenkins | 2009/07/02 | log in or register to post a reply

J.H.

I think most of the new rules impact the recorders' ability to scan the document into the system, since images are available online.  Sometimes the scanner will not record information that is outside certain margins ----or the type is illegible if the original letter size is too small.  Also, we have to make it as easy as possible for all of the foreign "title searchers" overseas to see the documents and translate the words.

 
by J. H. | 2009/07/02 | log in or register to post a reply

PRIA format and Standardization of Forms

The format is similar to the recommended PRIA format that is slowiy moving across the country. PRIA formatting makes sense, because all of us deal with lenders who have offices in many states and standardization of documents really makes sense.

Minnesota has gone even further, by creating "Uniform Conveyancing Blanks." Dozens of common documents were designed in conjunction with the State Bar Association, County Recorders and Title Companies. Even most RECORDING FEES are standardized across the state. Truly a godsend when we used to have to keep track of all sorts of fees, county by county!  I say more standardization - bring it on!

 
by Jeanine Johnson | 2009/07/06 | log in or register to post a reply

Theory of unintended consequences

North Carolina went through the same process several years a go with most of the expected problems.  Closers would let clients put int. in the forbidden zone, Notary's would put their stamp in margins.  Stray phantom lines from copiers would be on each page.  It's no fun trying to white out lines on a 35 page D/T. 

The most troubling result, but no surprise, was the mortgage companies wanting us to front the "Uniforming Document" fee.  Of course, after it is on record, even with the name of who authorized the additional fee, it is almost impossible to collect the fee from some lenders as their accounting is based on the HUD statement and all funds have been dispersed.

North Carolina said the change was to pay for extra time required to scan documents that did not fit the template.

Good luck!

 

 
by WAYNE QUICK | 2009/10/06 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

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