While the benefits of independent RT are numerous, two of the largest standout: (1) the pressure RT places on mortgagees (lenders) to provide proper and timely releases and therefore results in the improvement of the land records; and (2) the value RT holds in addressing the problem of attorney defalcations. First, the problems that a changing secondary mortgage market created did not go unnoticed. New laws appeared, and existing laws were given more teeth to punish deficient mortgagees. See C.G.S. §49-8; ME Title 33: Ch. 9: Subch. 2: §551; M.G.L. Ch. 183; §55; NH RSA 479:8; RI Section 34-26-5; and VT Stat. Ann. Tit. 27, § 464. These laws could be a powerful incentive for lender compliance, but only if utilized. Unfortunately, aside from threatening statutory language appearing at the bottom of payoff letters, the laws went unused.
Independent RT companies not only had the time and resources to pursue missing assignments and releases, but this was their very mission statement. By bringing independent RT companies into the process, law firms no longer had to be concerned with the time-consuming contest. In turn, with RT companies following up with mortgagees for releases that were late, the lenders were forced to improve their procedures for producing releases. This generated the intended result of helping to cure title defects and cleaning up the land records.
Secondly, with RT companies tracking and following up on files where releases have not been delivered, it makes it all the more difficult, if not impossible, for attorneys to perpetrate a fraud by not paying off the loans mandated by the HUD-1 Settlement Statement. With RT companies acting as the watch dog over the settlement agents, defalcations should no longer proliferate. See Stephen B. Goddard, Complainant vs. Ronald L. Lepine, Respondent, Connecticut Grievance Complaint #03-0364. With RT acceptance increasing, evidenced by RT showing up on more and more HUDs, and even on some lender's GFE's, real estate lawyers would be well-served to embrace the future, give much needed relief to their staff, and greatly improve the entire process. Additionally, with the obvious oversight benefits, state bars, organizations, and associations should consider mandating independent RT on all closings in order to control attorney fraud and defalcations.
William Snider, Esq., is co-owner and member at Final Trac, LLC, Hartford, Conn.

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