Sept. 7, 2022
In This Issue:
- TLTA Judiciary Committee Update: Deeds Conveying Title to a Trust - Fifth Circuit Weighs In and Vacates Fugedi
- FHFA Announces Comprehensive Review of the Federal Home Loan Bank System
- Texas A&M Real Estate Research Center: Passive Activity Rules for Investors
- Live and New in 2022: Title 101, and Owning and Managing a Texas Title Agency
TLTA Judiciary Committee Update: Deeds Conveying Title to a Trust - Fifth Circuit Weighs In and Vacates Fugedi
Chance Perkins, TLTA Judiciary Committee Member | Sept. 6, 2022
Most escrow officers have encountered the common scenario of a deed conveying title into a trust as opposed to the trustee of the trust. The underlying concern with such a deed is that it may be void or voidable for lack of a grantee based on a combination of the “a trust is not an entity in Texas” line of cases with the “a deed is void if the grantee is not in existence at the time of the execution of the deed” line of cases.
But up until 2021, no court had actually combined those two lines of cases to hold that a deed into a trust was void and did not convey title. That changed on March 31, 2021, when the federal District Court for the Southern District of Texas issued its opinion in Fugedi v. United Rentals (N.Am.) Inc., No. 3:19-CV-00249, 2021 WL 1220032 (Fugedi). Using those two lines of cases, the court found that a deed conveying title to Texas real property to a trust, as opposed to the trustee of the trust, is void. Worse still, the court also held that such a deed can never be corrected with either a material or non-material correction, and any attempted correction of such a deed is invalid.
Recognizing the extreme harm the Fugedi opinion could do to our industry, TLTA filed an Amicus Curiae Brief to the federal Fifth Circuit Court of Appeals on December 27, 2021, in support of reversing the District Court’s judgment and allowing the established practice of correcting such vesting issues via the Texas correction statutes (Texas Property Code §§ 5.027-5.030) to continue.
Read More About the Fifth Circuit's Ruling »
Review TLTA's Amicus Brief »
TLTA's Judiciary Committee, which is chaired by Leslie Johnson, is responsible for recommending to our board of directors TLTA's position on court decisions that could affect the defense of title companies and title agents.
FHFA Announces Comprehensive Review of the Federal Home Loan Bank System
FHFA | Aug. 31, 2022
The Federal Housing Finance Agency (FHFA) today announced it will conduct a comprehensive review of the Federal Home Loan Bank (FHLBank) System beginning in the fall of 2022.
“FHFA plays a vital role in supporting affordable, equitable, and sustainable access to mortgage credit,” said FHFA Director Sandra L. Thompson. “FHFA’s regulated entities function as a reliable source of liquidity and funding for housing finance and community investment. As the Federal Home Loan Banks approach their centennial, FHFA will conduct a comprehensive review to ensure they remain positioned to meet the needs of today and tomorrow.”
As part of the review process, FHFA will host two public listening sessions and a series of regional roundtable discussions to consider and evaluate the mission, membership eligibility requirements, and operational efficiencies of the FHLBanks. FHFA will hear from stakeholders on the FHLBanks’ role or potential role in addressing housing finance, community and economic development, affordability, and other related issues.
Read More »
TLTA Editor's Note: ICYMI, FHFA recently announced intention to establish a Federal Advisory Committee on Affordable, Equitable and Sustainable Housing Committee. The GSEs (who are regulated by FHFA) have been increasingly focused on housing affordability, and closing costs continue to be at the center of that affordability discussion.
Fannie Mae Issues Selling Guide Update Regarding Use of Attorney Title Opinion Letters. Tracks Changes Freddie Mac Made in 2020.
Review Fannie's Selling Guide Announcement »
Fannie Mae's Report: Barriers to Entry – Closing Costs for First-Time and Low-Income Homebuyers (from December 2021)
Read More »
Texas A&M Real Estate Research Center: Passive Activity Rules for Investors
Texas A&M Real Estate Research Center | Aug. 24, 2022
Federal tax law contains several meaningful and problematic fault lines. Among the most notable is the capital gain-ordinary income fault line. Another significant one is the passive activity rules, which real estate investors and professionals commonly encounter.
Passive activity rules have existed since 1987, when Congress decided to enact rules separating those who materially participate in their business or investment activities from those who do not. The rules provide that if someone materially participates in an investment activity, losses from the activity can offset profits from ordinary income. If the person does not materially participate, then losses from the activity can only offset profits from passive sources and cannot be offset against ordinary profits.
Read More »
Live and New in 2022: Title 101, Owning and Managing a Texas Title Agency
Title 101: An Introduction to Title Insurance in Texas
Presented live Oct. 17-18, 2022
Plano
Our TITLE 101 series was created for title employees who are new to the industry or have experience in only one area of title insurance. This basic, comprehensive 12-part series, which will be presented live in Plano Oct 17-18, provides all the basic training and knowledge you need on the fundamental aspects of Texas title insurance. Presented by TLTA subject-matter experts, this program covers everything from basic property concepts to post closing issues. If you have less than two years of experience in the title industry or are a title professional looking for basic industry knowledge, this program is for you!
Register Now and Book a Hotel Room »
Owning and Managing a Texas Title Agency
Presented live Oct. 17-18, 2022
Plano
TLTA is pleased to present updated training for new title agency owners, those new to a management position, or those in need of a refresher. Presented live in Plano Oct. 17-18 by experienced title industry professionals, this one-of-a-kind program will cover topics such as regulatory compliance, accounting, other key duties and responsibilities of a title agent, and much more. This program is designed to satisfy the requirements of Rule P-28(B) by the Texas Department of Insurance for management personnel of title agents applying to be licensed.
Register Now and Book a Hotel Room »