the official publication of t 'American Land Title Association

April, 1973 A Message from the Chairman, Abstracters and Title Insurance Agents Section

APRIL, 1973 The American Land Title Association is a vibrant, responsive organization composed of individuals like your­ self, dedicated to your profession as title men and women. As you strive for accuracy and service based on complete records, experience and financial responsibility, ALT A works to achieve the national objectives of your industry.

Our profession, like every other, is continually changing. Legal concepts, judicial decisions, new investment ideas, and varying land uses such as rights above and below the surface are being utilized for many purposes (e.g. underground utilities, and gas storage, condominiums, air rights). These concepts, though not totally new, are expanding to all areas of the country and affect each of us. Look back 10 years ago at the use of the land in your county, look at it today, and then project it another 10 years in the future. You should see a re­ markable change in each period.

Because of these concepts, and other innovations in land use, our customers are asking for more complete coverage in the abstracts we prepare. As abstracters-title agents we must compile, keep constantly up to date, and search additions to municipal, township, county and state records in order to supply the necessary data to issue the type of title policy demanded by today's mortgage lenders and investors.

The individual or corporation in the title business today cannot survive, or even exist, if he has not altered his approach, updated his plant, equipment and methods to keep pace with hi customers.

He must realize that the growth areas, people and industry are spreading to what were once considered rural or outlying areas. The limited amount of land, increase in population, the need for more homes, apartments, and buildings and the mobility of Americans seeking business and recreation in winter, summer and all seasons are all factors.

We must attune ourselves to this new pattern. How can you do it? First, listen to your customers to determine their real needs, and then try to give them the necessary service and information to solve their problems. You may have to compile additional records but you can also be devising systems and short-cuts.

Second, talk with other title people to see how they handle customers and problems. Attend your state and national title association meetings. Perhaps you "owe it" to yourself to attend, become better informed, gain new insights and become personally acquainted with others in the industry.

Third, remember that our very capable executive staff in Washington, D.C., ably headed by Bill McAuliffe, can help you or direct you to others to lend a helping hand.

The American Land Title Association is very involved, stands ready to assist you, and is your Association. ?~r~ · Robert J . Jay FIRST MAJOR "8REllN-THROtJfiH'1 IN 2S YEARS IN REiil ESTATE TllBlES! NEW INTEREST RATES INCLUDED

Your NEW Hard-Working fillT FOR RElllTORSl Created by Realtors for Realtors

In addition to the conven­ tional loan amortization payment tables, the New, 240-page Realty Computer provides, in shirt-pocket size, thirty-eight tables and checklists badly needed by real estate people in their daily transactions. You owe yourself an appraisal of the REALTY COMPUTER-one of the finest professional fact­ finders you have ever seen. Your clientele will be asking for it.

Write today for your complimentary copy PROFESSIONAL PUBLISHING CORPORATION 122 PAUL DRIVE • SAN RAFAEL, CALIFORNIA 94903 This talented group wants to sing 1our praises

These talented performers are ready sue and awareness of mortgagor title to sing the praises of your title company insurance. You decide which approach through local radio advertising. They're is best for your local need - or substi­ waiting- on tape- in the recently­ tute another. introduced ALT A Do-It-Yourself Here's how it works. First, order the Commercial Kit. kit. Then work out your radio adver­ If you're an ALTA member, you can tising campaign with one or more local buy the kit-on a first come, first stations. Adapt the enclosed commer­ served basis-for $50 plus postage. cials to carry your message - or write Just write Gary Garrity in the ALTA your own. Have a local announcer­ Washington office. You'll be billed or other appropriate talent - record later. voice copy to link your message with What's in the kit? The singers, of the taped music. And-presto-you course. On 7 1/2 ips mono tape. Fur­ have a customized local radio cam­ nishing high quality contemporary paign to strengthen your market iden­ music for a 20, a 30, and a 60-second tity. commercial. Plus instructions and sug­ What does the group sing? This jin­ gested copy for three different title gle: "Who can ease all your worries ... company radio advertising approaches. when you're buyin' a home ... who For promoting use of local attorneys can bring you protection . . . the title or real estate brokers. For establishing man can." local identity for a title company exec­ Better order now. They're doing utive. For promoting simultaneous is- your song. American Land Title Association 1828 L Street. N.W. Washington, D.C. 20036 litle News the official publication of the American Land Title Association

Association Officers President Features James 0. Hickman Pioneer National Title Insurance Company Chicago, Illinois The Secondary Mortgage Market: Its Challenges and Opportunities 4 Vice President James A. Gray AL TA Radio, TV Spots Reach Millions in 1973 7 Fidelity Abstract Company Benton, Arkansas Part II I: ALT A Judiciary Committee Report 9

Chairman, Finance Committee Alvin W. Long Chicago Title and Trust Company Chicago, Illinois

Treasurer James G. Schmidt Commonwealth Land Title Insurance Company Philadelphia, Pennsylvania

Chairman, Abstracter& and Tiiie Insurance Agents Section Robert J. Jay Departments Land Title Abstract Co. Detroit, Michigan

Chairman, Tiiie Insurance and A Message from the Chairman, Abstracters and Title Insurance Agents Underwriters Section Section Inside Front Cover Robert C. Dawson Lawyers Title Insurance Corporation Names in the News 12 Richmond, Virginia

Immediate Past President Meeting Timetable 16 John W. Warren Albright Title & Trust Company Newkirk, Oklahoma ON THE COVER: ALTA home buyer education television public service film announcements featuring celebrities are gaining wide visibility among an audience of millions from coast to coast. Additional millions are re­ Association Staff ceiving similar ALT A educational messages on radio. In this typical view, Executive Vice President film from the Association is threaded in the projection room of a local William J. McAuliffe, Jr. television station. For the story on this successful ALT A Public Rela­ Director of Research tions Program effort to reach a nationwide audience of opinion leaders Michael B. Goodin and home buyers through television and radio, please turn to page 7.

Director of Publlc Affairs Gary L. Garrity

Business Manager VOLUME 52 , NUMBER 4, 1973 David R. Mclaughlin

Association General Counsel TITLE NEWS is published by American Land Title Association, 1828 L Street, Thomas S. Jackson N. W., Washington, D.C., 20036; (phone) 202-296-3671 Jackson, Laskey & Parkinson 1828 L Street, N.W. Washington, D.C. 20036 GARY L. GARRITY, Editor CAROL MATHES HALEY, Managing Editor James E. Murray Senior Vice President and General Counsel Federal National Mortgage Association

The Secondary Mortgage Market: Its Challenges And Opportunities

(Editor's note: This article is adapted viding housing subsidies to those fami­ lishing the acceptability of FHA-in­ from a speech prepared for delivery at lies which require them, I believe that sured mortgages, many mortgage lend­ the 1973 ALT A Mid-Winter Confer­ an increasing number of home loans, ers would have little to do with these ence in Phoenix.) subsidized and unsubsidized, will be mortgages. Increased mortgage lending made within the framework of a devel­ also was restricted because many pri­ * * * oping national mortgage market. And I vate financial institutions had reached his is a period of dynamic change believe that the title insurance industry the limit of their lending powers for T for the housing industry and for will continue to play an important role home construction. Although Title ll I the lenders who finance housing. The in meeting the requirements of second­ of the National Housing Act authorized moratorium placed on interest subsidy ary mortgage market lenders. the establishment of national mortgage payments under Sections 235 and 236 associations which were to be chartered Origins of FHA and FNMA, Creation of of the National Housing Act signals the and regulated by the Federal Housing National Mortgage Market beginning of a transitional period in Administrator, no such companies were which consideration will be given to the Before examining actions taken by formed . In February, 1938, the Recon­ various means of providing subsidies to the Federal National Mortgage Associ­ struction Finance Corporation (RFC) the portion of our population that can­ ation (FNMA) to create a secondary organized an association which later not afford housing at market prices. market for conventional loans, under was named the Federal National Mort­ Suggested changes are numerous and authority granted it by the Emergency gage Association. The Association was wide-ranging. Some local governments Home Finance Act of 1970, I would directed to establish a market for the are considering the use of revenue shar­ like to discuss the origination and de­ purchase and sale of first mortgages in­ ing funds to provide housing subsidies. velopment of FNMA. An understand­ sured by FHA and to facilitate the con­ State housing finance .agencies have ex­ ing of FNMA' s background is essential struction and financing of rental and panded their .activities, making below­ in order to understand how the corpor­ private housing by making direct loans market rate loans with funds acquired ation's role in supplying funds from the insured by FHA. by issuing tax-free bonds. The use of capital markets to the mortgage market In comparison with its present port­ federal ·direct loans has been suggested, is fulfilled and perhaps to appreciate folio, FNMA's purchases during its as have housing .allowances included in more the progress which has been made early years were minimal. Its early ac­ public assistance payments. In addition, in the housing finance industry during tivities, however, were instrumental in industry representatives have recalled the last three decades. establishing a market for government­ the historic benefits o f the FHA pro­ FNMA had its inception in the ef­ guaranteed loans so that the corpora­ grams .and have urged their retention in forts of the federal government to com­ tion, along with insurance companies some form. bat the effects of the depression of the and savings banks, was able to meet I have been asked to speak today on 1930s. In response to the stagnation of the demands of capital-poor areas dur­ the role of title insurance in the national the housing industry, Congress in 1934 ing the building boom years of the late secondary mortgage market, a topic of enacted the National Housing Act. Al­ 40s and early 50s. much more certainty. For regardless of though it was generally believed that During the period from 1938 through the means which are adopted for pro- there would be little difficulty in estab- 1954, FNMA operated with funds bor-

4 APRIL 1973 rowed from the United States Treasury. the next city, much less across the During the 1950s many proposals for country. the formation of a privately financed The FHA mortgage insurance certif­ secondary market facility were con­ icate, statutorily incontestable, gave sidered and in 1954 Congress enacted a the secondary lender security. In the new charter which substantially changed event of default the lender could look to FNMA's organization and operations. the government instead of to the prop­ One part of the corporation, capitalized erty and to the creditor. FHA also pro­ by preferred stock issued to the govern­ vided a degree of standardization in its ment and common stock issued to pri­ mortgage instruments which enabled a vate investors, was authorized to con­ secondary lender to be assured that a duct the corporation's secondary mort­ valid lien had been created and that gage market operations, the purchase the property had been appraised and and sale of mortgages at market prices, the borrower's credit approved under principally with funds borrowed from established guidelines. FHA did not private sources through the issuance of relieve the lender of all responsibilities; short-term discount notes and longer­ it is still required in most instances to term debentures. The other part of the liquidate the security and to provide corporation operated the special as­ FHA with marketable title. sistance (i.e., subsidized loan) and man­ As a leading lender, FNMA deter­ agement and liquidation functions, al­ Author Murray mined as early as the late l 940's that most entirely financed with funds the secondary market required title in­ obtained from the federal treasury. surance as evidence of marketable title. In 1968, Congress severed the func­ Again the differences between localized tions that had been performed by for such capital on a national basis. lending and the national secondary FNMA and created two separate or­ Many people are aware of FNMA's market are apparent. For the local lend­ ganizations, a "new" FNMA which role as a stopgap lender, obtaining er, a certificate of title issued by lender's continues to operate the secondary mar­ funds from the capital markets during counsel may be acceptable. The second­ ket operations, and the Government periods in which the more attractive ary market lender can neither compile National Mortgage Association yields of corporate bonds divert funds local title records nor evaluate the com­ (GNMA), which performs the special from the savings institutions. A less petency of title attorneys for the many assistance and management and liqui­ dramatic function of the secondary areas in which it purchases loans. The dation functions. The "new" FNMA, market is shifting funds from capital­ interdependence of title insurance and described as a "government-sponsored surplus areas to regions in which these secondary market lending is demon­ private corporation" and "private cor­ funds are in short supply. strated by the fact that the area which is poration with a public purpose" was a What are some of the prerequisites of most resistant to title insurance, New unique creature, but in light of the crea­ this secondary market? The first is liq­ England, is a capital-surplus area which tion of Comsat, the Postal Service, the uidity, that is, the ability of a lender to has shown the least interest in FNMA's Student Loan Marketing Association immediately sell loans in its portfolio programs. and many state housing finance agen­ when the need arises. Prior to the estab­ Recent Developments in the Secondary cies, FNMA may be said to serve as a lishment of the FHA, few investments model for future ventures by the public were more illiquid then a residential Market and private sectors. FNMA has grown mortgage. The typical loan involved a I now would like to discuss briefly and prospered in the 18 years since lender who was acquainted with the some recent developments in the sec­ enactment of its Charter Act and now is neighborhood in which the property ondary market. FNMA began purchas­ listed by Forbes magazine as the na­ was located and who had formed an ing conventional mortgages in Feb­ tion's sixth largest corporation in terms impression of the market acceptability ruary, 1972. For a number of reasons, of assets, with assets in excess of $20 of the structure itself. The borrower including heavy inflows into the savings billion. often was a customer of the lender or institutions, initial response was limited. of another bank on whose judgment Recently, FNMA has made a num­ the lender could rely. The lender may ber of changes in its conventional loan Characteristics of Secondary Market have made other loans in the area so program to make that program more I have reviewed FNMA's history and that an independent appraisal may not attractive. On November 6, 1972, it its growth as background to a discus­ have been required. Finally, officers of raised the maximum loan-to-value ratio sion of some of the characteristics of the lending institution may have had for conventional loans from 90 per cent the secondary market and the role personal relationships with the bor­ to 95 per cent, but required that the played by title insurance. The goal of rower which would override under­ yield for loans with loan-to-value ratios the secondary market simply stated is writing considerations. It is not diffi­ in excess of 90 per cent be 1/4 per cent to assure that sufficient capital is avail­ cult to understand why the typical higher than the yield for commitments able for housing and to meet the need mortgage loan was not marketable in obtained in FNMA's auctions of con-

TITLE NEWS 5 ventional loan commitments. On Feb­ market lenders. As an institution whose ing, will expand the market for condo­ ruary 6, 1973, this requirement was portfolio is measured in the billions and minium loans, and I will discuss later eliminated. FNMA also extended the whose debt is financed over a relatively how title companies can be of assist­ use of its "convertible standby" com­ long term, FNMA did not consider ance. For PUD unit loans, FNMA will mitments to conventional loans. Under these provisions to be essential. These require, in addition to normal title cov­ the convertible commitment, the considerations were not present for the erage, evidence of lien-free ownership of FNMA seller (mortgage originator) has typical savings institution. In recogni­ the common elements by the home­ the option of delivering mortgages with­ tion of the differing needs of lenders, owners' association. in twelve months from the issuance of FNMA recently announced that it FNMA next intends to begin work the commitment at the yield established would purchase loans originated on on its conventional multifamily pro­ by FNMA, or converting such commit­ FHLMC forms provided the originat­ gram, which will require the develop­ ment to a four-month commitment, ing lender has notified the borrower ment of forms and underwriting stand­ in which case yields will be the average that while FNMA holds the borrower's ards. The corporation also is exploring yield of the last FNMA auction pre­ loan it would not require a prepayment methods of cooperating with the state ceeding the date of conversion. As a penalty or enforce the due-on-sale pro­ housing finance agencies. The develop­ result of these recent changes, interest vision. ment of these programs and increased in the conventional program has in­ In addition to the note and security conventional single-family loan pur­ creased beginning with auctions con­ instruments, advances have been made chases, coupled with the moratorium ducted in early 1973. FNMA issued in attaining uniformity for other mort­ on federal subsidies, are expected to commitments totaling $138 million on gage instruments. In cooperation with decrease the percentage of FNMA's offers of $206 million in the first three the appraisal societies, FNMA pre­ portfolio represented by subsidized auctions of 1973 as compared with a pared an appraisal form which has mortgages. commitment of $51.9 million on offers been approved by FHLMC. It also pre­ Expanded Title Insurance Coverage of $93 .6 million in the first three auc­ pared forms used to verify employment tions of the conventional program last and bank deposits. If a secondary mar­ Having reviewed recent advances in year. In addition, FNMA has issued ket for conventional loans is to expand, the secondary market and acknowl­ $206 million of conventional "converti­ the use of standardized instruments edged the role of title insurers, I would ble standby" commitments in 1973 . such as those developed by FNMA is like to move on to new areas of cover­ Most of you are aware of the prob­ essential to assure investors that loans age, which might be called the "outer lems encountered by FNMA and the have been originated under generally limits" of title insurance. I realize that Federal Home Loan Mortgage Corpor­ acceptable underwriting criteria. some of my proposals will be considered ation in drafting their mortgage in­ FNMA is preparing programs per­ by many to be outside the scope of tra­ struments. In my speech at your mid­ mitting the purchase of conventional ditional coverage. In presenting them I winter meeting in 1971 in San Diego, I mortgages covering individual con­ ask you to consider the needs of the outlined some of the problems we en­ dominium units and units located in secondary lender, his unfamiliarity with countered in seeking standardization of Planned Unit Developments. In view local law and custom and the costs in­ these forms. There are a few points I of the nationwide interest in this type of curred in examining loan documents. believe need emphasizing. First, the ownership, we expect the rapid develop­ What are some of the opportunities experience of FHA forms insured as ment of a secondary market for these presented to title insurance companies? first liens by title companies and sold loans. 1. Expanded coverage for con­ throughout the nation was invaluable. For condominium units, FNMA will dominium loans. The requirements Although FNMA received comments require an endorsement to the mort­ of FNMA's program are divided from hundreds of lenders, the majority gagee's title insurance policy which will into underwriting standards and were directed to items related to the provide that: (1) FNMA's mortgage in­ protections granted to the mortga­ lender's yield. Lenders intended to look terest is a first lien on a unit which has gee by the applicable statute, the to title companies to insure the efficacy been validly created under applicable master deed and other condomin­ of the instruments in securing their enabling statutes, and (2) real estate ium documents. Examples of the interests. Secondly, I would like to taxes are assessed and lienable only as latter in addition to those covered thank the title companies for the as­ against individual units together with by the endorsement FNMA intends sistance which they rendered. Finally, it their individual interests in the common to require are: (a) the mortgagee's should be noted that substantial uni­ elements, and not as against the project written approval of abandonment formity among the forms for the vari­ as a whole. Much remains to be done in of the condominium, partition and ous jurisdictions was obtained, and acquiring uniformity in condominium a change in the unit owners' per­ uniformity between the FNMA and documentation. At present, the expense centage interests in the common FHLMC forms should be realized in of examination usually has resulted in elements; (b) notice given the the future. The primary differences loans for all units in a condominium mortgagee of default in the unit between the FNMA and FHLMC project, even those resold, being held mortgagor's obligations under the forms, prepayment penalties and the by one lender. FNMA believes that the condominium documentation and due-on-sale clause, are examples of the gradual establishment of uniform re­ differing needs of local and secondary quirements, both legal and underwrit- Continued on page 13

6 APRIL 1973 After screening and acceptance, the ALT A film was logged into the WTOP­ TY program schedule for use in free air time donated by the station as a public service. Soon the ALT A film messages - enhanced by three celebri­ ties contributing their talents without charge-were reaching thousands of viewers in the Washington area. During the first three months of 1973, similar procedures took place at more than 180 stations across the nation as ALTA Radio, TV Spots the ALT A announcements were tele­ cast to an audience numbering in the Reach Millions in 1973 millions. Once again, the importance of television's role in public information had been demonstrated through an ac­ tivity of the ALTA Public Relations Program. arly this year, a package of ALT A telecasting by the station and some Recognizing that the home buying Epublic service film announcements were not. Station personnel determined public is an ever-changing audience, arrived in the mail at WTOP-TV, that the ALT A announcements would ALT A public relations endeavor in­ Washington, D.C. Featured on the 16 be telecast by WTOP-TV in the public cludes television and radio material re­ mm color sound film are messages call­ interest. leased at strategically-timed intervals ing public attention to the importance Featured in separate 30-second an­ through the year. Besides the pre­ of learning about home buying and nouncements comprising the ALT A viously-mentioned television celebrity land title protection before completing package are Ted Knight of CBS Tele­ film announcements, ALT A home a real estate purchase. vision's, "The Mary Tyler Moore buyer education television slide an­ The ALT A film, along with public Show"; Bob Reed of ABC Television's, nouncements are sent out in the early service announcements from other or­ "The Brady Bunch"; and Rod Serling spring. Contained in the slide an­ ganizations, were checked in by WTOP­ of NBC Television's, "Night Gallery". nouncement package are slides featur­ TV staff for screening and evaluation. During their spots the three stars sug­ ing cartoon art work for telecasting and Within a short time, the group of film gest finding out the details on home accompanying public service scripts offerings was reviewed. Some were buying in advance-and writing ALTA read on the air by local announcers. In found acceptable for public service for free home buyer guidelines. addition, ALT A produces two 60-

Use of ALTA home buyer education television public service slide an­ of ALTA home buyer education is use of pre-recorded radio public service nouncements includes their projection with station equipment (left) as an announcements featuring celebrities. which are broadcast by stations announcer in another part of the studio reads copy. Another effective part from coast to coast (typified by the photograph at right).

7 TITLE NEWS second television public service film clips for distribution in late spring and early fall, respectively. Each clip fea­ tures a mini-drama using live actors to emphasize certain aspects of home buy­ ing and land title protection. And, AL TA in the spring distributes a pack­ age of home buyer education public service radio announcements for use in time donated by stations; these also feature celebrities donating their talents. Station acceptance of ALT A televi­ sion and radio messages is excellent. The related effort by celebrities, sta­ tions, and AL TA produces a significant increase in public awareness regarding preparation and precaution before home buying. Starring on the 1973 ALT A home buyer education radio announcements distributed this spring to more than 5,500 stations from coast to coast are: Edward Asner, winner of an Emmy Award for his television performance on "The Mary Tyler Moore Show"; Linda Crystal, highly talented televi­ sion actress who duplicates her an­ nouncement in English and in Spanish to meet the need of Spanish language stations; and Tex Williams, veteran western music star whose distinctive voice is heard on an announcement de­ signed for country and western music stations - and on one other spot. An idea of the impact made possible through station use of AL TA an­ nouncements can be obtained by read­ ing through the following list of cities, each being the location of at least one station that telecast the Knight-Reed­ Serling film spots. In some of the cities, more than one station used these an­ nouncements. Not all cities where the announcements were seen are in the list since some s tations do not advise ALT A regarding use. Alabama- Dothan Alaska-Anchorage, Fairbanks

Continued on page 14

Celebrities featured on 1973 ALTA television and radio home buyer education announce­ ments are shown here. At left. from top to bottom, are Ted Knight. Bob Reed. and Rod Serling. each starring on a 30-second televi­ sion film announcement. At right. from top to bottom. are Linda Crystal. Edward Asner. and Tex Williams. who contribute their talents on this year's ALTA public service radio an­ nouncements.

1973 8 APRIL • Part 111 • ALTA Judiciary Committee Report

(Editor's note: Members of the ALT A Ga win v. Redevelopment Authority of Mil­ of Peters's lot was 4900 square feet, and en­ project­ Judiciary Committee have submitted waukee, 53 Wis. 2d 380, 190 N. W. 2d 201 croachment covered 465 square feet, (1971) ing 15 feet 3 inches into its 50 foot width. over 500 cases to Chairman John S. Sec. 269.25, Stats., was applicable to con­ Archambault's home had been built in 1946 Osborn, Jr., of the Louisville law firm demnees' circuit court appeal from an award and bought in 1954 and Peters bought his lot of Tarrant, Combs, Blackwell & Bullitt, in the instant condemnation proceeding, the in 1966 and discovered the encroachment by for consideration in the preparation of record revealing that their attorney of record a new survey. The trial court ordered the withdrew from the case almost five years encroachment removed and Archambault the annual Committee report. Chair­ after the filing of the appeal, that no sub­ appealed. man Osborn reports that 116 cases have stitution was ordered until shortly prior to Decree for removal was affirmed pursuant been chosen for the report. For pre­ a hearing of a motion to dismiss the appeal to majority opinion by Cutter, J, with a rare vious installments of the report, please (which had not been brought to trial), and dissent by Tauro, C. J. The majority opinion en­ see the February and March, 1973, which motion was made more than five years stated that a land-owner was ordinarily after the date the appeal was filed, no evi­ titled to injunctive relief in other than "ex­ issues of Title News.) dence being proffered justifying the undue ceptional" cases, that here the encroachment delay or excusing the neglect of their former greatly increased the congestion of the lot, attorney. and stressed the importance of protection of registered land to a greater extent than land * * * DePaul v. Kauffman. 441 Pa. 386, 272 A. 2d unregistered. 500 ( 1971) The dissenting opinion considered the in­ In this case a group of apartment building stant case in the "exceptional" category, EMINENT DOMAIN owners brought suit challenging the consti­ stressed the plaintifrs voluntary purchase tutionality of the Pennsylvania Rent With­ and actual notice and the burden which re­ State of New Jersey v. Mehlman, 118 N. J . holding Act (Act of January 24, 1966 P. L. moval would cast on the defendant, insisted Super. 587, 289 A. 2d 539 (N. J. 1972) 1965 as amended - 35 P. S. Secs. 1700-1 et that denial of an injunction could not impair It was decided that in a highway condem­ seq.) The Supreme Court in affirming the de­ Peters's registered title, and suggested in­ nation proceeding, an attempt to determine a cision of the lower court held that the act in stead that the boundaries be corrected to con­ fair market value for vacant land by capital­ question was not an unconstitutional dele­ form to the location of the house upon some izing income expected to be realized from gation of legislative authority to the Phila­ payment by Archambault to Peters. buildings not yet built, without considering delphia Department of Licenses and I nspec­ the variables involved in building, financing, tions which has the duty of determining what operating, and leasing such buildings, was is or is not "fit for human habitation" nor improper. The court refused to determine was the term so lacking in specificity as to LANDLORD AND what method should be used for appraisal of render the act void for vagueness. Finally, TEN ANT - LEASES the fair market va lue at the time of the tak­ the court held that the act did not work an ing, but remanded the case because the arbitrary nor unreasonable taking of a land­ Raponolli v. Burnt-Mil Arms, Inc., 273 A. method used by the court below was unrea­ lord's property without due process of law 2d 372 (N . J. 1971) sonable under the above criteria. nor did it impair the obligation of contracts. The owner of an apartment building pro­ Surety Savings & Loan Assa. v. State, 54 vided a swimming pool for the tenants with­ Wis. 2d 438 ( 1972) out additional charge. No lifeguard or safety While compensation is required if a prop­ IMPROVEMENTS equipment was provided and a sign stated erty right is so impaired as to amount to a "private" and "swim at your own risk." One taking of land by, for example, denying all Peters v. Archambault, 1972 Mass. Adv. Sh. of the tenants had a pool party with outside access thereto, injury to property resulting 221 guests with the owner's permission. One of from the exercise of state police power, such Bill in equity to compel removal of a por­ the guests drowned. as designation of a highway as a controlled­ tion of Archambault's home encroaching on Held: The pool was operated "indirectly" access highway, does not entitle a landowner Peters's land. Title to both lots had been for profit and was "a public pool" within the to compensation because direct access to a registered under the Torrens system. Neither meaning of the New Jersey statute even controlled-access highway is denied, where title certificate recited rights in favor of Ar­ though the general public was excluded. Con­ other access is given or otherwise exists. chambault's lot over Peters's lot. Total area sequently, the jury should have been charged

TITLE NEWS 9 that they could infer negligence from a viola­ cordingly, the possibility of reverter could Overmyer v. Frick, (U. S. Sup. Ct. Feb. 24, tion of the statute. not be enforced. 1972), 31 L. Ed. 2d 124 A similar statute in California has been The court pointed out that similar statutes A cognovit note in a contract is not, per se, interpreted in the same manner. See Lucas v. had been held unconstitutional in Florida and violative of the due process provisions of the Hesperia Golf and Country Club, 63 Cal. in New York, but that, on the other hand, Fourteenth Amendment. Fact situations, Rptr. 189 (1967) the Supreme Court of lllinois had sustained however, will determine whether a debtor, by his execution of a cognovit note, voluntarily, Point E. Man. Corp. v. Point E. One Con­ such a statute. The Nebraska court was of the opinion that the statute was reasonable intelligently, and knowingly waived his due dominium Corp. , 258 So. 2d 322 (Fla. App. and was intended to increase the utility of process rights to notice and hearing. 3rd DCA - J 972) land and marketability of titles. The U. S. Supreme Court upheld the re­ Association brought suit against manage­ fusal of the Ohio Court of Appeals to vacate ment corportion seeking cancellation of a judgment confessed against the appellant. contract and for cancellation of lease inter Looking to the fact that the appellant was a alia. MINES AND MINERALS corporation with much experience with con­ Held that management contracts invalid, tracts and notes, that the note was executed declaring them to be in violation of the Con­ Kirk v. Smith, 253 So. 2d 492 (Fla. 1971) only after the appellant had become delin­ dominium Act, and the leases were valid. Question: Where the State of Florida con­ quent on an earlier contract, and that the Both management contracts and leases veys property and retains mineral reserva­ opportunity had been afforded, pursuant to were made prior to sale of any units. The tions, and the fee simple or surface owner Ohio law, to have the confessed judgment leases were of direct benefit to purchasers but fails to pay county ad valorem taxes, will a opened, the Supreme Court determined that the association under the Condominium Act subsequent tax deed without reservations ex­ the appellant had not been rendered defense­ (and usually under Declaration of Condo­ tinguish and cancel the mineral rights of the less by any unwitting waiver of due process minium) is charged with management duties, state? rights. which they may contract for if they choose. The court found that when the conveyance The Supreme Court noted, however, that However, in this instance the management is made prior to 1957 , the date of enactment the decision is not to be taken as controlling contracts were of such long duration the of F. S. 193.481(formerly193.221), providing precedent for other cases. In other situations, court felt the association had been effectively for separate taxation of the surface and sub­ such as adhesion contracts, great disparity in deprived of control. surface interests when they have been sepa­ bargaining power, or lack of consideration A concurring opinion specifically points rated, the governing statute is F. S. 211.14 for the cognovit provision, the legal conse­ out that although the management contracts which provides "All ... sales of lands for quences might be different. in question are invalid it is because of the nonpayment of ad valorem taxes shall include the sub-surface oil and gas and mineral inter­ specific terms and duration and is not to say Swarb v. Lennox, (U. S. Sup. Ct. Feb. 24, ests." Therefore, since the state granted to all such contracts are invalid. 1972), 405 U.S. 191 the county the right to enforce payment of ad Cardona v. Eden Realty Co., Inc., 118 N. J. The Pennsylvania rules and statutes gov­ valorem taxes by sale of the property without Super. 381, 288 A. 2d 34 (N. J. 1972) erning confessions of judgment are not un­ reservation of any interest therein, such tax constitutional on their face, since, under ap­ A tenant in a multi-tenant tenement build­ deed vests in the grantee a new and indepen­ ing sued for injuries sustained in a fall in propriate circumstances, a debtor may be dent title. the building's stairway. The defendant-land­ held to have effectively and legally waived It should be noted the result may be other­ lord defended on the grounds that the tenant his due process rights. wise when the tax deed is made subsequent to had received a lease at a reduced rate in con­ The U. S. Supreme Court affirmed a 1957. The argument that the state's interest United States District Court, Eastern District sideration for renting the apartment "as is" is not subject to taxation and thus not subject and for a clause in the lease which exculpated of Pennsylvania decision which held the to foreclosure by tax deed may prevail. the landlord from any acts of negligence Pennsylvania confession of judgment pro­ Even though the tenant had an option to cedure unconstitutional as to debtors with eliminate the exculpatory clause upon the annual incomes of under $10,000, but which payment of an additional two dollars rental MORTGAGES AND LIENS denied relief to proposed class members with per month, the court upheld the lower court's incomes $10,000 and over. judgment for the tenant. The court found Ratner v. Chemical Bank New York Trust Appeal was taken on the question of the that the landlord and the tenant were in un­ Company, DC N. Y., Feb. 14, 1972 lower court's limitation of the class to be equal bargaining positions, weighted oppres­ Maintenance of a class action was denied granted relief. A finding of error in this limi­ sively in favor of the landlord. Thus, the in a case involving a potential $13 million tation would have been, in effect, a blanket court ruled the exculpatory clause contrary to recovery by cardholders who had received declaration of unconstitutionality of all cog­ public policy and unenforceable. billing statements on their credit card ac­ novit notes. Since such a holding would run counts which did not comply with the dis­ contrary to the Supreme Court's finding in closure requirements of Truth-in-Lending. the companion Overmyer case (see above) In an earlier order, the United States Dis­ that cognovit notes are not unconstitutional MARKET ABLE TITLE trict Court, Southern District of New York, per se, the decision was affirmed. determined that the defendant bank had The court was careful to note that this ACTS violated Truth-in-Lending when it failed to decision is not to be construed as an approval disclose a "nominal annual percentage rate" of the entire Pennsylvania cognovit proce­ Hiddleston v. Nebraska Jewish Education of finance charge on its monthly credit card dure, particularly in view of the limited scope Soc., 186 Neb. 786 (1971) billing statements in instances when no actu­ of the appeal. Action to enforce a right of reverter upon al finance charge was imposed. the termination of a fee simple determinable. In this subsequent order, the court deter­ la Sala v. American Savings & loan Asso­ The defendants demurred, arguing that the mined that there was no affirmative need or ciation, Sup. 97 Cal. Rptr. 849 ( 1971) possibility of reverter had been extinguished justification for a class proceeding in the The borrowers brought a class action by statute which purports to bar all possi­ circumstances of the case. The allowance of against their lender for a declaration of the bilities of reverter and rights of reentry after the thousands of minimum recoveries sought invalidity of defendant's form of deed of 30 years from the date of the creation of the by plaintiff for the class would carry to an trust permitting defendant to accelerate the condition or possibility of reverter. The issue absurd and stultifying extreme, and be in­ indebtedness if the borrower executes a junior involved was the question of the constitution­ consistent with, the specific individual encumbrance on the secured property (due­ ality of the statute. remedy prescribed by Congress as the means on-encumbrance clause). The named plain­ Held: The statute was constitutional. Ac- of private enforcement of Truth-in-Lending. tiffs had encumbered their property with a

10 APRIL 1973 fo.r the junior encumbrance and the defendant, after of remedies. Here the court said "an unsatis­ to the collateral to satisfy the debt, notifying plaintiffs of its right to accelerate fied judgment does not constitute a remedy." collateral no longer exists. and after first offering to waive its right to In Re Penn Central Transportation Com­ J. I. Kislak Mortgage Corp. of Delaware v. accelerate in return for a cash consideration pany, 341 F. Supp. 815 (E. D. Pa. 1972) William Mathews Builder, Inc., 287 A. 2d and increase in the rate of interest, offered to This case concerned property rights relin­ 686 (Del. Super. Ct. 1972) waive enforcement of the clause as to them. guished by the trustees of the debtor railroad Plaintiff brought an action to foreclose on The Supreme Court held that the receipt by company and liens upon such property. A a construction mortgage given by the defend­ the class representative of all the individual predecessor of the railroad had retained an ant. A sub-contractor intervened, claiming benefits he seeks in the complaint does not easement on a railroad spur in Massachusetts priority for its mechanic's liens. The court mechanically render the plaintiff unfit per se in conjunction with the conveyance of the granted the intervenor's motion for summary to continue to represent the class. Whether balance of specified realty to the local trans­ judgment, holding that although plaintifrs the named plaintiffs would fairly and ade­ portation authority. Subsequently, the rail­ mortgage was recorded prior to the time that quately protect the class was an issue resting road agreed to release the authority from its the intervenor's mechanic's lien attached in the discretion of the trial court. If the trial obligation to rebuild track which it had re­ (when work commenced or materials first court concluded that plaintiffs could no longer moved from the easement and from its obli­ supplied), the plaintiff had the option as to suitably represent the class, then the court gation to restore the easement, in consider­ whether to make further progress payments should at least afford the plaintiffs the ation for a sum of money. Mortgages held by and did so with the knowledge that the inter­ opportunity to amend their complaint to re­ indenture trustees had become liens after the venor's mechanic's liens had attached. Thus, define the class, or to add new individual original conveyance, but prior to the release. to the extent of those further advances, the plaintiffs, or both, in order to establish a suit­ The trustees of the railroad claimed that the mortgage lien was held inferior to the me­ able representative. If, after the court has monies received from the release should be chanic's lien . thus extended an opportunity to amend, the made available for general operating pur­ Charles H. Weaks and wife, Helen J. Weaks class still lacks a suitable representative the poses because the liens were upon an ease­ v. Gary T. Gress and wife, Barbara J. Gress, court should not dismiss the action without ment which was by its terms terminable 474 S. W. 2d 424 (Supreme Court of Tennes­ first notifying the members of the class. The should the railroad suspend local service. The see - 1971) Supreme Court further stated that controver­ indenture trustees claimed that the funds Hus band and wife conveyed their real es­ sies involving widely used contracts of ad­ should go to them, for the release was a sale state owned by them by the entirety with full hesion, such as trust deeds, present ideal of the easement which was subject to their warranties as being free from encumbrances cases for class adjudication. mortgage liens. The court ruled for the inden­ at a time when there was in existence a judg­ The court said that a due-on-encumbrance ture trustees, not because the release was a ment lien against the husband only. Pur­ clause is not per se an illegal restraint upon sale of the easement, but because the cove­ chasers brought action against sellers for alienation. However, enforcement of that nant to restore the easement was an interest breach of covenant by reason of the fact that clause by accelerating the indebtedness un­ running with the land. When the railroad the property was encumbered by the judg­ lawfully restrains alienation whenever the disposed of this interest in realty for valuable ment lien and sellers defended with the argu­ borrower's execution of a junior encumbrance consideration, the liens attached to the pro­ ment heretofore valid in Tennessee that the does not endanger the lender's security. The ceeds. judgment lien against one spouse did not court could not resolve the issue merely by attach on property owned by the entirety and examination of the pleadings and declarations because the interest of one individual spouse before it on appeal from the trial court's dis­ Hallman v. Hospital & We/f Bd. of Hills­ in the property is only an expectancy. The missal of the action on the narrow ground borough Co., 262 So. 2d 669 (S. C. Fla. 1972) Supreme Court held that inasmuch as the that the named plaintiffs no longer repre­ Suit by hospital and welfare board against right of the individual spouse is transferable sented the class. wife and husband to recover on note signed it constitutes an equitable right in the prop­ The court was of the view that a due-on­ by wife upon husband's discharge from hos­ erty and is subject to any lien against the sale clause did not constitute an unlawful pital. Held that provision of statute enacted individual spouse. Therefore the lien attached, restraint on alienation. A sale of property under old constitution requiring writing "exe­ the covenant of clear title was breached, and usually divests the borrower-vendor of any cuted according to the law respecting con­ claim for damages will lie. interest in that property, and involves the veyances by married women" in order to In remanding the case the Supreme Court transfer of possession, with responsibility for hold wife's separate property liable for hus­ went even further and directed the lower maintenance and upkeep, to the vendee. The band's debt was repealed by new constitution court to explore the question whether also lender's security may be endangered through section providing: the seller's wife breached the covenant against consequence also waste or poor credit with the "There shall be no distinction between encumbrances, in which case she would that the due-on-sale clause, designed to married women and married men in the be liable and her individual property subject thwart such acts without the lender's consent, holding, control, disposition, or encum­ to a lien and execution. not consti­ pre­ is reasonable and therefore does bering of their property .. . . " This case is a complete reversal of the which tute an unlawful restraint on alienation. Thus judgment on the note signed by the vious opinion of the Supreme Court, decided "respect­ wife could be levied against her separate was as quoted above and able authority to the contrary." In following Holstein v. Adams, 194 N. W. 2d 216 (Neb. property. up two prior decisions making the interest of 1972) Hurdy v. Russo, 118 N. J. Super. 114, 286 A. a spouse in real estate owned by the entirety A mortgagor in a foreclosure proceeding is 2d 717 (Super. Ct. App. Div. 1972) transferable, it now designates such right as not entitled to personal service of the pub­ The plaintiff held bonds secured by second an equitable right in property and not just an lished notice of sale. The requirement of mortgages on realty. Upon foreclosure of the expectancy, which is not a transferable right, notice is satisfied by publication. (Sec. 25- first mortgage and sherifrs sale of the prop­ and thereby making not only the interest of 520.01, R. R. S. 1943) erty, the plaintiff brought suit against the the spouse. against whom the judgment was Junction Bit & Tool Co. v. Village Apart­ defendant, obligor on the bonds, which re­ rendered subject to its lien, but keeping the ments, Inc., 262 So. 2d 659 (S. C. Fla. 1972) sulted in a summary judgment for the plain­ other spouse, whose interest is free and clear Foreclosure action on mortgage brought tiff. On appeal, the court affirmed, rejecting from liens, from warranting title to the prop­ after obtaining a judgment on the note is not the defendant's claim that the fair market erty as being free from encumbrances. barred if judgment is unsatisfied. value of the property originally covered by In this the Supreme Court receded from an the mortgages be deducted from the balance earlier decision (State et rel. Teague v. due to the plaintiff. The court ruled that once Landlord and tenant Harrison , 190 So. 2d 483 ( 1939) where it was the security is extinguished by foreclosure of stated that action on the note was an election a prior mortgage, the mortgagee cannot look leases -to be continued

II TITLE NEWS Joseph D. Burke, executive vice presi­ personnel services supervisor, to man­ dent, has been elected a member of the ager of the Elko county operations; board of directors of Commonwealth Byron Benson to vice president and Land Title Insurance Company. Com­ manager responsible for operations of monwealth also announced two promo­ the central, north, east and west dis­ tions in its Lancaster office: Barbara tricts of Los Angeles; and Basil Jackson, Ann Monyer to assistant vice president Warner Harrah, and Donald J. Coyle and title officer and Ralph E. Albright to district managers. to assistant title officer. * * * BURKE MONYEA * * * Louisville Title of Arizona has named Robert C. Dawson, ALT A Title In­ ~ . H. C. Ritenbaugh vice president and • 4 surance and Underwriters Section chair­ manager, and Tom Funicello chief title man and president of Lawyers Title officer and assistant secretary. Insurance Corporation, has been elected a director of The Life Insurance Com­ * * * pany of Virginia. Fidelity Title Insurance Company has , . elected William G. Hanschmidt vice * * * president and manager, and Larry C. Lawyers Title Insurance Corporation " Fulton assistant vice president and has elected Garland G. DonleaYy man­ ALBRIGHT DON LEAVY regional counsel, in its newly-opened ager of its Hartford (Conn.) office and Denver office. Raymond E. Johansen, manager of its Ventura (Calif.) office. * * * Lawyers Title Insurance Corporation Sonoma County Abstract Bureau has named F. Spencer Cosby, Jr., as has announced several promotions: head of its recently-opened National Fred W. Due to senior vice president, Division office in Houston, which is Donald A. Due and Mark J. Cohen to the tenth office of that division operated vice presidents, and John W. Frederick by the company across the nation. to title department manager. Robert S. DeLangie has been named JOHANSEN HANSCH Ml OT manager of the company's San Jose * * * (Calif.) branch office. The Title Insurance Corporation of Pennsylvania has named Warren R. * * * Strouse title officer. Title Insurance and Trust Company has promoted Neil F. Barton, title proc­ * * * essing manager, and UaYid B. King, Donald L. Marr has been elected vice marketing representative of the western president and manager of the Wayne, region, to vice presidents; Harold Oakland, and Macomb County oper­ Arman, senior associate counsel, to ations of Pioneer National Title Insur­ senior division counsel; Robert L. Byrne, FULTON STROUSE ance Company.

12 APRIL 1973 Victor C. Vesco has joined the Na­ sion manager for a national title insur­ tional Department of Mid-South Title ance concern. Pease has spent 43 years Co., as an associate of W. J. Gallagher, in the land title industry. Plans are to vice president in charge of agent serv­ change the name of the acquired con­ ice. His duties as a field representative cern to Bend Title Company and con­ will take him throughout Arkansas, tinue operations in its present location. Mississippi, and areas of Tennessee out­ The company was purchased from side Shelby County. Jesse and Velma Yardley.

* * * BONO LEONARDI * * * Ted Bond and John Leonardi, Jr., The Title Guarantee Company, Balti­ recently opened Mid America Title more, has named Thomas C. Carlin, Company, a new title and escrow com­ assistant secretary; Louis C. Jira, assis­ pany serving the Lake County (Ill.) tant secretary; and Loretta P. Fryer, area. assistant secretary and treasurer. * * * * * * Vance N. Caskey, vice president, has John P. Lanigan of Hampton Bays director and member of has been elected assistant vice president been elected a S E CLEMENTS the executive committee of District­ of Metropolitan Title Guaranty Com­ Realty Title Insurance Corporation. -~ ' .!- pany, Carle Place, N.Y. -, * * * * * * Stewart Title Guaranty Company has Mrs. Carol Mathes Haley has joined announced the appointment of Robert the ALT A staff in Washington, D.C., G. Clements, former manager of the as public relations associate and man­ Oak Cliff branch office, to manager of aging editor of Title News. She most the Galveston County operations. recently was associated with Project GUSTAFSON VANDERLIP HOPE, where her responsibilities in­ * * * cluded fund raising activity and writing. Curt Gustafson has been named man­ Earlier, she was a development writer ager of the Colorado operations for for Emory University, Atlanta; public Transamerica Title Insurance Com­ affairs manager and editor for the De­ pany. Kalb, Georgia, Chamber of Commerce; and editor and feature writer for South­ * * * ern Bell Telephone in Atlanta. The Tl Corporation has named Rob­ ert E. Vanderlip senior vice president in organization planning and ROVE ADAMS charge of SECONDARY MARKET-continued from page 6 development and Robert G. Rove as­ sociate general counsel. * * * an opportunity to correct the de­ fault; and (c) that a unit is not sub­ Pioneer National Title Insurance has ject to unreasonable restraints promoted John de Sheplo to the posi­ upon alienation. In the future, in­ tion of vice president and James J. stead of a time-consuming exami­ Ronan to the position of assistant vice nation by the mortgagee, I envision president. amendments to condominium stat­ PEASE YARDLEY * * * utes to attain greater uniformity, the adoption of model documents Raymond G. Adams has been ap­ and, finally, the issuance of stand­ pointed sales manager of the southern ard endorsements to the mortgagee region, Los Angeles county, Security policy insuring the lender that all Title Insurance Company. of its requirements (other than underwriting) have been met. * * * 2. Flood plains. At such time Warren J. Pease has purchased Bend as the federal government has pre­ (Ore.) Abstract Company following his pared maps of high risk flood retirement as vice president and divi- LANIGAN HALEY areas, could title companies insure

TITLE NEWS 13 that the mortgaged property does given to adopting such an endorse­ RADIO. TV-continued from page 8 not lie within such areas? ment. 5. Usury. I am aware of the 3. Many states have enacted or reluctance of companies to grant Arizona-Tucson are considering the enactment of any coverage in this area but I be­ Arkansas- El Dorado, Ft. Smith, so-called environmental protec­ lieve that very limited coverage Little Rock tion acts requiring filing of en­ may in some instances be appropri­ California- Chico, El Centro, Fres­ vironmental impact statements for ate. An example is the usury statute no, Los Angeles, Oakland, Redding, certain types of projects - could in the state of Michigan. In elim­ Sacramento, Salinas, San Diego, San insurance be obtained that the inating the limitation on maximum Francisco project being financed by the in­ interest rates for most lenders, the Colorado-Colorado Springs, Grand sured would not require such a legislature banned all other charges Junction, Sterling statement? including the imposition of an Connecticut - Hartford, Waterbury 4. The FHA has published in origination fee. The effect was to Florida- Fort Myers, Jacksonville, its regulations a list of unobjection­ largely eliminate the origination of Miami, Pensacola, St. Petersburg, Tal­ able title exceptions. FNMA has conventional loans by Michigan lahassee, West Palm Beach included a similar list in its Con­ mortgage bankers for sale in the Georgia-Atlanta, Augusta, Savan- ventional Selling Contract Sup­ secondary market. We have been nah plement. Our experience has shown advised that two title insurance Hawaii- Honolulu that the inclusion of certain types companies are willing to insure the Idaho - Lewiston of title exceptions in the mortga­ originating lender and its assignees Illinois- Chicago, Harrisburg, Rock­ gee's policy often results in unnec­ that if the insured issues the bor­ ford, Rock Island essary correspondence between rower a commitment using a letter Indiana- Elkhart, Indianapolis, FNMA and the originating lender approved by the companies and the Lafayette, Terre Haute and delay in purchase of a loan. A commitment period is not less than Iowa -Ames, Cedar Rapids, Daven­ proposal had been made by one 30 days and the lender collects a port, Ottumwa, Sioux City company, which I do not think has non-returnable fee , the loan will Kansas-Copeland, Ensign, Great been implemented, to issue an en­ not be rendered usurious by the Bend, Topeka dorsement to the mortgagee's pol­ imposition of such a fee. Kentucky - Lexington, Living­ icy insuring against loss or damage These are a few of the types of ex­ ston, Louisville sustained by a refusal to accept title tended coverage which I believe title Louisiana - Alexandria, Baton in connection with a future FHA insurance companies should consider Rouge, New Orleans, Shreveport insurance claim resulting from ex­ granting. As I stated in the beginning Maine- Bangor istence as of the date of the policy of my talk, these are changing times Maryland- Baltimore of such matters as restrictive cov­ for the housing industry. I believe you Massachusetts - Boston, New Bed­ enants, easements affecting the land, will agree that change is not restricted ford, Springfield, Worcester encroachments and outstanding oil, to policy questions and that recently Minnesota- Duluth, Mankato, Min­ gas and mineral rights. Such an en­ enacted statutes such as truth-in-lending neapolis dorsement would be very useful. At and consumer protection laws and de­ Michigan- Flint, Port Huron, present, for government and con­ cisions rendered by the courts poten­ Traverse City ventional loans, FNMA's lay ex­ tially have increased the risks incurred Mississippi-Columbus, Greenwood, aminers must seek advice from by lenders, both in the origination of Jackson staff counsel (who often must ob­ loans and in liquidation upon default. Missouri -Columbia, Jefferson City, tain additional information from Too often the reaction of some title Joplin, St. Louis the originating lender) when insurance companies to such changes is Montana- Butte, Kalispell, Missoula generally-worded exceptions ap­ a hastily worded addition to the list of Nebraska-Albion, Grand Island, pear in the mortgagee's policy. The exceptions in Schedule B. Although in Kearney, Scottsbluff use of the proposed endorsement in some instances this can be the only re­ Nevada-Las Vegas, Reno most cases would relieve sellers of sponse, I urge you to look for addi­ New Mexico- Roswell the obligation of obtaining waiver tional means of serving the industry and New York- Binghampton, Buffalo, letters from FHA and issuing cer­ invite you to submit your proposals to New York City, Plattsburgh, Rochester, tifications, and in those cases where FNMA for our consideration. I believe Schenectady, Utica the endorsement would exclude that the development of an extensive North Carolina-Asheville, Hickory, certain matters, FNMA's lay ex­ secondary market for conventional resi­ Washington, Wilmington aminer and the originating lender dential loans and the $70 billion market North Dakota- Fargo, Williston would be alerted to the possibility which will be opened presents a signif­ Ohio - Akron, Cincinnati, Dayton, that waiver letters would be re­ icant opportunity for expansion of the Lima, Parma, Toledo quired, either from FHA or from mutually-necessary relationship be­ Oklahoma-Oklahoma City FNMA (for the conventional pro­ tween secondary market lenders and Oregon - Eugene, Klamath Falls, gram). I urge that consideration be your industry. Portland

14 APRIL 1973 Pennsylvania-Altoona, Erie, Phil­ real estate brokers provide to earn their At the same time, Commonwealth adelphia, Pittsburgh, York commissions and why home buyers promotes title insurance protection for South Carolin a-Columbia need title insurance protection -and do new buyers. At the close of each com­ South Dakota-Aberdeen, Sioux it humorously? mercial, as the announcer raises the in­ evitable questions that need answering Falls "Commonwealth Land Title Insur­ in the "next episode" , the last question Tennessee-Jackson, Knoxville ance Company of Philadelphia thinks deals with title insurance. For example: Texas-Austin, Beaumont, Dallas, it is. And so do the brokers," Mr. "And what about title insurance? Will Houston, Laredo, Lufkin, San An­ Greenwald, continues. tonio, Sherman, Temple, Waco, Wes­ the new buyer protect himself from the The Commonwealth campaign is a laco, Wichita Falls hidden dangers lurking in John's satire of the old-time radio "soap op­ Utah -Salt Lake City house?" eras" and is entitled, "John's Other Vermont - Burlington After the initial spots were broad­ House." Each one-minute spot is a cap­ Virginia- Hampton, Harrisonburg, cast, each broker received an envelope sulized radio drama, complete with Portsmouth, Richmond, Roanoke labeled, "John and Blanche are here." organ music, which continues from Washington - Spokane, Yakima Inside was a record containing the ser­ commercial to commercial in telling of West Virginia- Bridgeport, Hunting­ ies of commercials, and information "one man's valiant struggle to sell his ton, Parkersburg about the campaign as well as the house himself''. Wisconsin - Lacrosse, Milwaukee, broadcast schedule. Office posters also Rhinelander Each sequence concentrates on one were provided. Wyoming- Casper, Cheyenne particular service that real estate brok­ The campaign is designed to focus ers provide for sellers, such as helping public attention on the professional to set the right price, arranging financ­ services of the real estate broker during ing, screening prospects and selling the the peak home buying season. After Commonwealth property quickly. According to Green­ broadcast of the commercials and the wald , this is accomplished by showing mailing, a survey conducted by the ad Campaign Cited the frustrations encountered by the agency indicated favorable reaction drama's long-suffering hero, John, who among local brokers. In the survey, 80 An award-winning Commonwealth is trying to do the job himself. per cent of brokers in the target area Land Title Insurance Company radio wife, Blanche, consistently were shown to be aware a title company and direct mail advertisin g campaign John 's him to stop fumbling the task and is promoting thei r services; 55 per cent is the subject of a full-page article in a urges in a professional real estate broker. correctl y identified Commonwealth recent issue of RAB Creative News­ call each dialogue, she Land Title as the company responsible letter, published by the Radio Adver­ In the course of the particular service a brok­ for the program and 48 per cent cor­ tising Bureau, Inc. brings out er would have provided to avoid John's rectly identified the media-direct mail The campaign last year won top hon­ and radio - used in the promotion. ors in the multi-media division of the latest blunder. district American Advertising Federa­ tion "ADDY" competition covering New York, New Jersey, Pennsylvania, Delaware and Maryland. In hi s RAB article, the author, Jo­ LAND EX seph T. Greenwald of Albert Frank­ 0 Automated title plants Guenther Law, Inc., Commonwealth's 0 Cartridged microfilm systems agency, writes: "Is it possible, in one minute, to educate the public about 0 Plant-building services such serious s ubjects as what services D Automation feasibility studies LANDEX systems and services are designed with the help of title people to serve the information-management needs of the title industry. May we tell you more? Check the topic above that interests you, clip this adver­ tisement, and send it with your business card to - Donald E. Henley, President

(213) 990-2130

INFORMATA INC

SP ECIALISTS IN INFORMATION MANAGEMENT/ 17258 VENTURA BOULEVARD, ENCINO, CA 91316J

15 TITLE NEWS August 23-25, 1973 meeting t.... metable Minnesota Land Title Association Quadna Mountain Lodge Hill City. Minnesota

August 24-25, 1973 Kansas Land Title Association Wichita Holiday Plaza Wichita, Kansas

1973

March 30-31, 1973 June 8-9, 1973 September 6-8, 1973 Florida Land Title Association Mid-Year South Dakota Land Title Association Ohio Land Title Association Meeting Holiday Inn Salt Fork Lodge Cambridge. Ohio Hilton Hotel Mitchell. South Dakota Tallahassee. Florida

June 14-16, 1973 April 12-14, 1973 September 13-14, 1973 Idaho. Montana and Wyoming Land Title Arkansas Land Title Association Wisconsin Land Title Association. Inc. Associations Fayetteville. Arkansas The Dome Resort Pink Garter Plaza Marinette. Wisconsin Jackson. Wyoming April 13-15, 1973 Oklahoma Land Title Association Camelot Inn June 20-22, 1973 September 13-15, 1973 Tulsa. Oklahoma Illinois Land Title Association North Dakota Land Title Association Drake Hotel Villager Motel Chicago. Illinois Lincoln, Nebraska May 3-5, 1973 Texas Land Title Association Camino Real Hotel Mexico City, Mexico June 21-23, 1973 September 14-16, 1973 Colorado and Utah Land Title Associations Missouri Land Title Association Manor Vail Hotel Muehlebach May 6-8, 1973 Vail. Colorado Kansas City, Missouri Iowa Land Title Association Hyatt House Des Moines. Iowa June 21-23, 1973 September 30-0ctober 4, 1973 Oregon Land Title Association ALTA Annual Convention May 10-12. 1973 Ka -Nee-Tah Lodge Century Plaza New Mexico Land Title Association Warm Springs. Oregon Los Angeles. California Airport Marina Hotel Albuquerque. New Mexico

June 24-26, 1973 October 22-24, 1973 May 10-12, 1973 Michigan Land Title Association Mortgage Bankers Association of America Washington Land Title Association Hidden Valley New York Hilton. and the Americana Evergreen Inn Gaylord, Michigan New York. New York Olympia. Washington

May 23-25, 1973 July 12-14. 1973 October 28-30, 1973 Indiana Land Title Association California Land Title Association New Jersey Land Title Association Atkinson Hotel Newporter Inn Seaview Country Club Newport Beach. California Absecon. New Jersey Indianapolis. Indiana

June 3-5, 1973 November 7-10, 1973 Pennsylvania Land Title Association August 6-9, 1973 American Bar Association Annual Meeting Dixie Land Title Association Host Corral Sheraton-Biloxi Lancaster. Pennsylvania Sheraton-Park Hotel Washington. D.C. Biloxi. Mississippi

June 7-10, 1973 August 22-25, 1973 November 9-15, 1973 New England Land Title Association New York State Land Title Association National Association of Real Estate Boards Stratton Mountain Inn Whiteface Inn Sheraton Park. and Hilton Hotels Stratton Mountain. Vermont Lake Placid. New York Washington. D.C.

16 APRIL 1973 Tell Your Story More Effectively . with these ALTA Educational Aids (All orders plus postage; write Business Manager, ALTA, 1828 L Street, N.W., Washington, D.C. 20036)

Closln ~~,ii_~ Costs ··.- ~ loul y .. • ... IURI OUf' ~ , ~ - Plrcll8S8 ( -~ .. l ~ ~~

HOME BUYER: HORSE SENSE CLOSING COSTS AND YOUR PURCHASE OF A AMERICAN LAND TITLE ASSOCIA­ HELPS! A concisely-worded direct HOME. A guidebook for home buyer use in learning TION ANSWERS SOME IMPOR­ moil piece that quickly outlines about local closing costs. Gives g e neral pointers on TANT QUESTIONS ABOUT THE title company services. 1-11 dozen, purchasing o home and discusses typical settlement TITLE TO YOUR HOME. Includes 65 cents per dozen; 12 or more sheet items including land title services. 1-11 dozen, the story of the land title industry. dozen, 50 cents per dozen; de­ $2.25 per dozen; 12 or more dozen, $2.00 per $16.00 per 1 00 copies of the book­ signed lo fit in o No. 10 envelope. dozen. let.

HOW FHA HELPS THE HOME LINCOLN LOST HIS HOME ... THE IMPORTANCE OF THE ABSTRACT IN YOUR BUYER. This public education BECAUSE OF DEFECTIVE LAND COMMUNITY. An effectively illustrated booklet that folder was developed in coopera­ TITLES ... A memorable example uses art work from the award-winning ALTA film, tion with FHA and basically ex­ of the need for land title protec­ "A Place Under The Sun", to tell about land title plains FHA-insured mortgages and tion is described in this folder. defects and the role of the abstract in land title land title services. $5.50 per 100 $5.00 per 100 ca pies is the cost for protection. Room for imprinting on bock cover. copies . this publication. $12.00 per 100 ca pies.

(RIGHT ) BLUEPRINTFOR HOME BUYING. Illustrated booklet contains consume r guidelines on important aspects of bluepnnt home buying. Explains roles of vari­ ous professionals including broker, tor attorney and titl eman. $18.00 per home hundred copies, 20 cents each on 99 or fewer copies. ( RIGHT) ALTA FULL. buying LENGTH FILMS : " BLUEPRINT FOR HOME BUYING ." Colorful animated 16 mm. sound film , 14 minutes long, w ith guidance on home selection, financing, s ettleme nt. Ba sis fo r popu· la r booklet mentioned above . $95 per print. " A PLACE UNDER THE SUN ." Aw ard win ning 21 min ute animated 16 mm . color sound film te ll s the story of the land ti tl e industry a nd its se rvices. $135 per print . American Land Title Association