Legislative Changes Affecting Register of Deeds Offices in 2005

1. Legislative Changes Affecting Register of Deeds Offices in 2005

2. Major Changes • No acknowledgement certification • Limited acknowledgement verification • New satisfaction forms • New satisfaction affidavit • No marginal notes • ID number redaction upon request • Electronic recording and notary standards to be set

3. Register NOT responsible for verifying: • Acknowledgement legal sufficiency • Officer authority • Document legal sufficiency

4. To be checked on acknowledgement or proof: • Officer’s signature • Commission expiration date • Official seal if required

5. Satisfaction of Security Instrument: Mortgagee Deed of trust beneficiary Other secured creditor Trustee’s Satisfaction of Deed of Trust Trustee Satisfaction Forms

6. “Security instruments satisfied of record pursuant to this subdivision as it was in effect prior to October 1, 2005, shall be deemed satisfied or record, discharged, and released.”

7. “No particular phrasing is required for a satisfaction of a security instrument. The following form, when properly completed, is sufficient to satisfy the requirements of G.S. 45-36.10(a):”SATISFACTION OF SECURITY INSTRUMENT(G.S. 45-36.10; G.S. 45-37(a)(7))The undersigned is now the secured creditor in the security instrument identified as follows:Type of Security Instrument: deed of trust/mortgage/etc:Original Grantor(s): grantor/trustor/mortgagorOriginal Secured Party(ies): original beneficiary/mortgagee/secured partyRecording Data: The security instrument is recorded in Book ______ at Page _____ or as the document number _____ in the office of the Register of Deeds for ________ County, North Carolina.This satisfaction terminates the effectiveness of the deed of trust.Date: ____________ ____________________________ Signature of trustee or substitute trusteeACKNOWLEDGEMENT

8. Still Available — Register’s Record of Satisfaction • Presentation by secured creditor, trustee, or lender of original security instrument and original note, endorsed satisfied and paid. • Presentation by grantor or mortgagor of original security instrument and original note after 10-year lapse. • Presentation by bearer of original instrument and bearer note marked paid by bearer.

9. “No particular phrasing is required for a record of satisfaction. The following form, when properly completed, is sufficient to satisfy the requirements of this subdivision:” Record of Satisfaction (G.S. 45-37.2) This Record of Satisfaction applies to the following security instrument: Type of Security Instrument: ______________________Original Grantor(s): _____________________________ Original Secured Party(ies): ______________________ Recording Data: The security instrument is recorded in Book ______ at Page _____ in the office of the Register of Deeds for _______________ County, North Carolina.This Record of Satisfaction terminates the effectiveness of the security instrument pursuant to the following statutory authority: (check applicable box) [ ] G.S. 45-37(a)(2), the original security instrument and secured obligations having been presented to me with appropriate endorsement of payment and satisfaction appearing thereon as required by law. [ ] G.S. 45-37(a)(3), the original security instrument and secured obligations having been presented to me, each such instrument being more than 10 years old as provided by law. [ ] G.S. 45-37(a)(4), the original security instrument and all negotiable instruments transferable by delivery secured thereby having been presented to me, each having been marked paid and satisfied in full by the bearer or holder thereof. Date: ____________ ____________________________ Signature of trustee or substitute trustee

10. Defunct Satisfaction Methods • Acknowledgement of Satisfaction Before Register • “Notice of Satisfaction” (now Trustee’s Satisfaction or Satisfaction of Security Instrument) • “Certificate of Satisfaction” (now Satisfaction of Security Instrument)

11. Register is NOT responsible for reviewing satisfaction instruments for: • Truth of the matters stated • Signatory’s authority

12. Register may reject satisfaction instrument if: • Submitted by unauthorized method or medium • Not signed and acknowledged

13. “Every action or duty within this Article imposes an obligation of good faith in its performance and enforcement.”

14. “Any document previously recorded or any certified copy of any document previously recorded may be rerecorded, regardless of whether it is being rerecorded pursuant to G.S. 47.36.1.”

15. Subsequent Instrument • Determine based on first two pages • Index: • Named parties to subsequent instrument • Identified original parties • Reference identified recording data of original instrument

16. Self-Help Satisfaction Affidavit • Type of security instrument • Original parties • Recording data and office • Authority — North Carolina attorney • Reasonable grounds for payment or performance • Description of authorized required notice • Statement of time lapse or creditor authorization • Agent’s signature and acknowledgement

17. Satisfaction Rescission • Identifies erroneous satisfaction or affidavit • Declares error • Declares obligation remains unsatisfied

18. Indexing Deeds of Trust • Grantor • Beneficiary

19. Identity Theft Protection Act • Registers must remove image or copy of ID from public Internet site upon request • Registers must post signs in office (all) and Internet site (if used) in statutory form about • Prohibition against including ID numbers in filings unless legally required • Right to request removal of ID numbers • Effective December 1, 2005

20. Request for Removal • Including SSN, driver’s license, passport, account numbers, PINs, passwords • Request must be • In writing • Delivered by mail, fax, e-mail, or in person • Specify ID to be redacted, information about the record • No fee allowed • Request is public record with restricted access

21. ELECTRONIC RECORDING

22. Electronic Recording • Secretary of State standards • Electronic Recording Council: 7 of 13 members will be registers • Electronic documents validated • New registrations • May convert paper • Must still accept paper • Electronic paper jointly indexed • Electronic notary • Education and registration requirements • Components attached to or logically associated • Signature will be defined by the Secretary of State

23. “But I don’t want comfort. I want God. I want poetry, I want real danger, I want freedom, I want goodness. I want sin.” “In fact, said Mustapha Mond, “you’re claiming the right to be unhappy.” “All right then, “said the Savage defiantly, “I’m claiming the right to be unhappy.” Aldous Huxley, Brave New World.

24. Mortgage Satisfaction Act SL 2005-123 Senate Bill 794 Practical Problems Fall 2005

25. For discussion purposes today is October 30, 2005

26. A deed presented today was signed by one person. The signature has not been acknowledged. Is this acceptable for recording?

27. A North Carolina notary took the acknowledgment on a deed presented today. The notary’s seal is missing. Is this acceptable for recording?

28. An out-of-state notary took the acknowledgment on a deed presented today. The notary’s seal is missing. Is this acceptable for recording in North Carolina?

29. An instrument was executed and acknowledged in New Jersey. An attorney licensed to practice law in New Jersey took the acknowledgement. The attorney used a seal that states “John Jay Attorney at Law”. There is no indication that John Jay is a notary. A copy of a New Jersey statute is attached that clearly states that attorneys licensed to practice law in New Jersey are authorized to take acknowledgements. Is this acceptable for recording in North Carolina?

30. Mary Jane Smith, Assistant Secretary of XYZ INC, signed a deed on behalf of the corporation. The notary’s seal, signature, and expiration date are present. Is this acceptable for recording?

31. An instrument has been executed by an attorney-in-fact. The acknowledgment does not follow the statutory form of acknowledgement for execution by an attorney-in-fact. The acknowledgement simply states that the person appeared before the notary and acknowledged the execution. The notary’s seal, signature, and expiration date are present. Is this acceptable for recording?

32. A deed of trust presented today was acknowledged by a North Carolina notary. The notary’s signature is illegible. The notary’s printed name does not exactly match the name in the seal. Is this acceptable for recording?

33. A notice of satisfaction presented after October 1, 2005 was signed by a secured creditor. The instrument is dated September 1, 2005. The notary’s seal, signature, and expiration date are present. Is this acceptable for recording?

34. A portion of deed of trust was rerecorded as the record of satisfaction for a cancellation that was done by presentation on October 2, 2005. The attorney who presented the instrument asked the register to make a cancellation entry on the record copy and on the original. Should the register comply with this request?

35. A certificate of satisfaction presented after October 1 2005 was not accompanied by the note or an affidavit of lost note. The certificate of satisfaction was executed and acknowledged by the noteholder. The notary’s seal, signature, and expiration date are present. Is this acceptable for recording?

36. Mary Jones, a personal friend of the register, called and asked the register if a specific deed of trust had been canceled. Should the register answer this question?

37. At the request of local attorneys the register of deeds in County A makes marginal entries on the record copies when deeds of trust are canceled. The register posted a notice that marginal entries would not be made after September 30, 2005. The attorneys asked the register to reconsider because the entries are very helpful. Should the register comply with this request?

38. An instrument titled “Satisfaction by Secured Creditor” is presented and does not contain the amount secured or the recording date. The notary’s signature, seal, and expiration date are present. Is this acceptable for recording?

39. May a trustee cancel by acknowledging the satisfaction in the presence of the register of deeds if the deed of trust was satisfied prior to 10/01/2005?

40. A satisfaction document is presented that refers to an incorrect book and page number. Nothing in the satisfaction document matches the book and page listed. The satisfaction document was signed and acknowledged by the person identified in the document as the secured creditor. The notary’s seal, signature, and expiration date are present. What should the register do?

41. A document titled “Cancellation by Satisfaction Agent” is submitted for recording. It has been signed and acknowledged by an attorney identified in this instrument as “Satisfaction Agent.” Is this acceptable for recording? If it can be recorded, how should it be indexed and what is the document type?

42. May deeds of trust be cancelled by presenting the original instruments endorsed paid after 10/01/05?

43. The first page of an assignment presented October 2, 2005 clearly states that Beneficial Finance, Inc is assigning their interest in a deed of trust to Household Finance. The grantor’s name and the book and page number of the deed of trust being assigned are in the middle of a paragraph on page 2. Is the register required to index the debtor’s name in this situation? If yes, how must the assignment be indexed?

44. An instrument titled “Trustee’s Satisfaction of Deed of Trust” presented October 2, 2005 was signed by a substitute trustee. The names of the grantors, original book and page number, and the original trustee are provided. How should this be indexed?

45. After October 1, 2005, registered are required to record satisfaction documents that may have different titles. Does the register have to create a new document type abbreviation for each type of satisfaction document recorded? Is it acceptable to use one document type for all satisfaction documents?

46. An affidavit of satisfaction is presented that is signed by an attorney who is identified as the satisfaction agent. The names of the parties to the original deed of trust are shown. Who are the indexed parties and what is the document type?

47. The definition of a subsequent instrument is very broad. How do I determine if an instrument qualifies as a subsequent instrument for indexing purposes?

48. A re-recording is submitted. A statement of explanation is not present. Should the register of deeds refuse to re-record an instrument that does not include some type of explanation?

49. An attorney requests a certified copy of an instrument previously recorded in my county. The attorney immediately asks that I record the certified copy. Is it permissible to record a certified copy if the original instrument is already on record in the same county?

50. A re-recording is submitted with a statement of explanation signed by the person who prepared the instrument. There is no indication that the person who signed the statement of explanation is an attorney. Is this acceptable for recording?