Answer: When the Consumer Financial Protection Bureau (CFPB) enacted an amendment to Regulation X, it began auditing residential mortgage lenders and their service providers in order to ensure that service providers, such as closing attorneys, followed very strict risk management standards designed to protect the Borrower. In order to establish these guidelines, ALTA Best Practices Standards were created. Some of these standards are designed to protect your private information, to maintain proper escrow accounting practices, including daily reconciliations, in order to protect and secure your funds, to comply with all State and Federal Consumer Financial Protection Law relating to residential lending, to ensure that your vesting deed and title insurance policy are delivered to you in a timely manner (within 30 days), to maintain strict wire fraud prevention measures and mitigation guidelines in the event of a breach, and to maintain cyber liability and crime prevention insurance.

In order to verify compliance with ALTA Best Practices Standards there are three (3) levels of audit: 1) Underwriter’s Audit, in which the title insurance company underwriter audits your files in order to verify that you meet applicable standards. This is not an official “Best Practices Certification;” 2) Self-Certification, in which the attorney completes a questionnaire and determines if the firm is compliant. No official certification is issued by a 3rd party, other than the attorney’s own statement of compliance; and 3) 3rd Party On-Site Certification, in which an independent auditor, certified to conduct ALTA Best Practices Certification Audits, comes to the attorney’s offices and does an extensive audit of the facilities and all protection and prevention measures being undertaken to protect clients NPI and funds and to verify that the firm is in compliance in all of the Best Practices areas of concern. McBride Richardson is audited every two (2) years under the strictest standards by a 3rd party independent auditor, who issues a Best Practices Compliance Certification.

It is important for you to use a law firm which has been properly certified in order to protect you and your funds. McBride Richardson would love to serve you.

Answer: Prior to closing, our staff will need personal information, such as your correct legal name by which you want to hold title, your current address, the address of the property you are purchasing, your phone number, your email address or any other contact information, your social security number, your marital status, sometimes a copy of your divorce decree, all repair invoices to be collected at closing, Wood Infestation Reports and the invoice, any Homebuyer’s Warranty information, a copy of your deed or the last deed in the chain of title, all estate information if the last owner is an estate or is deceased, the contact information for all lenders to be paid off at closing, the execution of a form authorizing our staff to communicate with your lender(s), and a copy of the last issued Owner’s Title Insurance Policy.

Answer: The Buyer will need two (2) forms of identification, one of which must be a government issued photo ID, such as a valid, current driver’s license. The Seller will need a government issued photo id, such as a valid, current driver’s license, and a social security card, or evidence of social security number, the verification of which is required by the IRS. You will need to bring the originals of any documents to have been signed prior to closing outside of the office, such as Deeds and Powers of Attorney. If you are married, bring your spouse. He or she will probably be required to execute several documents, which will be referred to in the “Who must sign at closing?” question below.

Answer: If you are a Seller, anyone who is shown on your deed as a Grantee must execute the deed. If you are married, even though your spouse is not named on the deed, if your spouse occupied the property being sold, she/he must execute the deed. This is required due to Alabama’s “homestead laws.”

If you are a Buyer, you execute all of the documents. If you are married, your spouse will be required to execute the Mortgage and several other documents, even if he/she will NOT be a Grantee on your deed. If your spouse cannot be present, please let us know in advance so that arrangements may be made for your spouse to execute a Special Power of Attorney authorizing you to sign documents for her/him. There are exceptions to the rules requiring that your spouse execute deeds and/mortgages at the time of your purchase, but you MUST contact us in order to verify that your spouse’s signature is not required and falls within the exception. For refinances of or the sale of property in which your spouse resides, even if your spouse’s name is not on the deed, the signature of your spouse is required.

Answer: You can write a personal check for a sum under $500.00; however, we prefer a cashier’s check, even for a sum less than $500.00. Even though we prefer a wire transfer, we will accept a cashier’s check for any sum up to $4,999.00. For any sum $5,000.00 and greater, a wire transfer is required. You will need to contact our staff directly for wiring instructions. We never direct you to wire your proceeds to a different account. We do not accept ACH transfers, credit cards, or debit cards for closing proceeds.

Answer: The closing will take place at the offices of McBride Richardson, P.C., 225 Grant Street S.E., Decatur, Alabama 35601. If you are unable to locate our offices, call 256-350-4100 for directions.

Answer: If you are a Seller, you should coordinate with the Buyer to have the utilities “transferred.” You should also cancel your homeowner’s insurance policy. Because insurance is normally collected a year in advance, you should receive a refund of the unearned premium on the policy. You should also look for a refund of any funds in your escrow account with your lender. If you do not receive this refund within three (3) to four (4) weeks, you should contact customer service for your lender in order to make inquiry about your refund. Any refund will not come through the closing attorney, but will come directly to you at the forwarding address you provided to your lender. If you are a Buyer, you should receive your original deed in the mail within thirty (30) days after closing. Upon receipt of your deed, you will need to make a trip to the Tax Assessor’s office at the courthouse in order to claim your homestead exemption or, if the property is not your primary residence, to assess the property in your name. The closing attorney will explain in detail at closing how to claim your homestead exemption. Failure to claim your homestead exemption will result in the taxes being double what they would be with the homestead exemption and the failure to assess investment property will result in a penalty

Answer: This is a frequently asked question and is becoming more common as more clients attempt to use the information they obtain on the internet. There are generic forms on the internet and in form books at office supply and bookstores. Unfortunately, the forms provided in these books are not generally acceptable in Alabama. Every state has its own particular requirements as to what is necessary for a legal document to be a valid and enforceable instrument in that state. Certain substantive requirements, such as granting clauses, habendum clauses, proper notary acknowledgments, etc., usually cause these generic forms to be legally defective and usually cause marketability problems if they are used. Most deeds and powers of attorney contained in these form books do not comply with Alabama law and a knowledgeable real estate attorney will not allow their use. Further, many lenders do not allow the use of a power of attorney and the ones that do, require that they contain very specific verbiage relating to the particular transaction for which the power of attorney is being used. Generic forms do not contain this verbiage and do not contain the proper notary acknowledgment. None of these powers of attorney that this writer has seen specifically authorize the execution of a deed and none of the deeds conform with Alabama law.

Another common error relating to the above instruments prepared by non-real estate attorneys and/or clients is the improper execution of a document using a power of attorney. Assuming that the power of attorney is in proper form and is properly executed and acknowledged, the instrument being signed by the attorney-in-fact must actually be signed as follows; “Archie Leach by Marion Morrison, his attorney in fact,” and the notary acknowledgment on the instrument must contain specific verbiage relating to this authority. Signing “Marion Morrison” on a signature line with the authoritative verbiage typed under it is insufficient. An instrument, such as a deed, which is not executed in exactly this manner and/or does not contain a notary acknowledgment in substantial conformity with Section 35-4-29, Code of Alabama, is defective and will create a “title problem,” thereby affecting the marketability of the property. It is never a good practice for a person to prepare his or her own legal documents.

Answer: Real estate law is a highly complex and specialized area of legal practice. Real estate is also an area in which consumers and businesses are well advised to seek legal counsel and advice. This is an area in which attempting to “do it yourself” can have serious long-term consequences, which can often be disastrous, for a number of reasons. First, problems with real estate title issues do not become apparent for many years. A mistake made at the time of a purchase, which could have been easily corrected at the time of purchase, may not make itself known until the time comes to sell the property many years later. By that time, it may be very difficult to correct the error because the appropriate person needed to sign a corrective deed or other instrument is either dead or cannot be located. Correcting the problem might then require that a court proceeding be undertaken at great expense. Second, real estate laws vary greatly from state to state. In many areas of the law, there is a trend to create laws that are more uniform from state to state in order to encourage interstate commerce and to foster interstate commercial transactions. Real estate, however, is immobile, and the laws in this area are very resistant to change and are resistant to trends toward uniformity. While all states, except Louisiana, share a common English law ancestry in the area of real estate law, each state has its own laws peculiar to that particular state. Real estate attorneys with concentrated expertise in this area are familiar with the laws of their state. It is important for anyone buying or selling real estate to retain the services of an experienced and knowledgeable real estate attorney to ensure that the transaction goes smoothly and that the interests of all parties are protected.