Posted by Andi/FL on 2/27/05 5:53am
Msg #22710

FL Notaries/Homestead States

I had an issue come up in a closing the other day that has been bothering me and I want your opinion. It was a primary residence contruction-perm with a married borrower. Neither the closing instructions from the title company nor the documents indicated that the spouse needed to acknowledge the mortgage. However, where necessary, several of the documents did say, "a married woman." Therefore I knew that they realized that the borrower was married. Because the documents were flawless, I assumed that the title company did not make a mistake and that the spouse will be added at modification.

I spoke with a friend who is a sales manager for a mortgage company, and she said that she thought they messed up (on her construction-perms they always add the spouse to the construction loan, before modification to perm).

I haven't had a call back from the title company indicating that I messed up, so I'm hoping that I didn't make a mistake. Any thoughts?

Reply by PAW_Fl on 2/27/05 7:31am
Msg #22711

The FL Homestead Laws can be very confusing. A good article on the subject can be found at http://www.alipman.com/snowbirdguide/chap16.html written by Allan Lipman ([e-mail address]).

I do not believe that construction loans for purpose of building a primary residence qualifies under the Homestead Act. But, when that loan is converted (if it is converted) to a standard mortgage, then it may qualify under the Homestead Act and therefore may need to have all interested parties on title and thus sign the mortgage (and some other "legals").

From my personal interpretation of the Homestead Act, even if the spouse is not specifically identified on the title and or mortgage, the Homestead Act will still protect their interest. Assuming that the property qualifies as "homestead property" as defined in the Florida Constitution and Statutes.

Reply by Andi/FL on 2/27/05 8:10am
Msg #22713

Thank you for the information. It was very helpful and put my mind at rest! By the way, I notice that you frequently find excerpts to post in replies to messages. Do you have a list of reference web-sites that you frequently refer to, or do you search the web when a question is asked? Just curious to know so that I can build my own quick reference guide for issues that arise.

Reply by PAW_Fl on 2/27/05 8:24am
Msg #22714

I do both. Whenever something needs to be researched, I try to write down (or attach a bookmark/favorites), that way I have it for my own reference as well as responding to the question if needed. Over the past several years, I have accumulated a rather long list of references on many different subjects. I've even noticed that some of the referenced sites that I have used in the past, no longer exist. Unfortunately, I usually don't keep the documents or text.

Reply by Bobbi in CT on 2/27/05 9:32am
Msg #22716

FL & Homestead Act

Not a lawyer. Not giving legal advice and not a Florida resident. I admire PAW/FL and his excellent answers. Because of my day job, which deals with Florida real estate and residency for estate planning purposes, hereare two things to consider:

During construction, purchase, or even after a few years, borrowers may not be Florida residents; therefore, homestead and other "married person" issues may not kick in the same as with a Florida resident. Our clients are either 1) not Florida residents with no intention of becoming residents for X years or 2) in the process of becominig Florida residents, haven't yet sold current residence or moved to Florida or gotten Florida drivers licenses (plus other items on the "how to become a Florida resident" checklist) and cannot use the advantages of the homestead act yet.

1. In the day job, many lawyers and I worry about homestead issues, how and do we want them to apply, how to keep or lose them, paperwork that must be filed, marriage/single/ soon-to-be-divorced or-married issues, particular with real property that may be titled in Trustees now or in the future, mortgage financing, and inheritence issues.

2. At night, when acting as a NSA where a borrower is financing Florida real property, I take my day hat off. Homestead issues in any state can be very simple or very complex. The title company or lender's closer preparing the documents is the responsible party to "get it right." As an out-of-state NSA, I do not want the responsibility of second guessing the title insurance company or the lender that prepared the documents. If they are wrong, I hope to get the re-sign. I let the title company receiving the documents or auditor make that determination - unless the borrower at the table KNOWS there is a problem with the documents and states so. Re-drawing documents affects funding date; if the receiver doesn't see a problem, "correcting" after the fact, does not affect when the borrowers get their money. If I were physically in Florida, like PAW, Sylvia or Victoria, working for title companies on a regular basis for more than $50 per signing, I would pay more attention to this aspect of Florida documents.

PAW: I cannot be specific or give details. We recently had one where homestead rights were "severed" or lost, which had nothing to do with real estate document language (which was correct according to FL law, whole different set of residency issues). Also, I learned that "a married woman" or "a married man" language in a Florida deed, without naming spouse, has totally different estate planning consequences than in CT, even if owners are CT residents at time of getting real property and at time of death. I have fascinating discussions with our FL real estate attorneys, particularly about the Florida conveyance tax on principal balances of existing mortgages when real property is transferred.

Reply by PAW_Fl on 2/27/05 11:38am
Msg #22722

Re: FL & Homestead Act

>>> Also, I learned that "a married woman" or "a married man" language in a Florida deed, without naming spouse, has totally different estate planning consequences than in CT, even if owners are CT residents at time of getting real property and at time of death. <<<

I too have learned there is a world of difference in vesting as "a married man/woman", "joined by his/her spouse", "tenant in common", and "husband and wife".

Thankfully, it's the title companies job to get it right. However, I do think it's prudent of the NSA to ask the title company when the vesting doesn't look quite right. They may know the answer, and they may not. But, again, it's not the NSA that decide what should be written, how it should be written, nor who signs what documents. If it isn't right, it's the title company that's on the hook.

And this is further complicated by the vast amount of "homestead" laws and commercial property laws and how they intertwine at times. It's better left to the practicing lawyers.

Reply by Sylvia_FL on 2/27/05 11:06am
Msg #22720

Andi,

First - a mistake MAY have been made, the spouse may need to have signed the mortgage.

BUT if a mistake was made you are not resposible. You are not an attorney.

I know that when I have a signing with a married person and their spouse is not listed on any of the docs, it is normal for the spouse to sign certain documents. I will call the title company and mention Florida is a homestead state and do they need the spouse's signature. They usually tell me they do and which docs they want the spouse to sign (some want more than others). If I can't get a hold of the company, then I just have the person whose name is printed sign.

The UPL counsel for Florida has advised me that as these are legal documents, for me to decide who should or should not sign is UPL, and I respect his advice.

If they need the spouse's signature they will probably send you back out to get it - and pay you another fee to do it.

Reply by Andi/FL on 2/27/05 12:36pm
Msg #22733

Thanks - I have another signing this week with the same title co and I will bring it up to them. The title co is also in Florida (as well as the lender), so this should be standard stuff. I typically do bring up issues with the title co or lender if a document is questionable, but in this case, it was a late night signing and given everything else was immaculate, I decided to proceed without calling.

Thanks everyone for your input. I appreciate it.