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Quick Answers: The Tip-Off
Chicago Bull
By Jeff Hrdlicka

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In the underwriting department, we receive a number of calls which start with the phrase "I have a quick question".  Surprisingly, a large percentage of these actually are "quick questions".  We have also noticed some common issues involved in these questions.  So, in the spirit of Jeopardy (giving the answer before the question), what follows is a list of some common quick answers.
  1. JUDGMENTS - Tenancy by the Entirety: With the exception of an IRS lien, a judgment against one spouse does not attach to property held as tenants-by-the-entirety. A joint judgment against a husband and wife on a joint obligation is a lien against property held as tenants by the entirety as well against any property, or interest in property, held individually by either spouse. Note that an absolute divorce converts an estate by the entirety into a tenancy in common; and a lien against one debtor spouse attaches, as of the moment of divorce, to that debtor’s interest in property. [For IRS liens, see United States v. Craft, 535 U.S. 274 (2002)].

    • Tenancy in Common: A judgment against a tenant-in-common attaches to that tenant’s interest in property.

    • Joint Tenancy with Right of Survivorship: A judgment against a joint tenant attaches to that tenant’s interest in property.

  2. ASSESSMENTS - We require the attorney to certify that there are no pending assessments; however, if we have knowledge that the property is a low risk for assessments (e.g. 50 acre tract in a very rural area, no chance of municipal water, sewage...), then the requirement can be waived.

  3. COUNTY AND MUNICIPAL (PROPERTY) TAXES - The lien for taxes on real property attaches to the parcel taxed on the date the property is to be listed. (Taxes on one parcel of real estate do not become a lien on other real estate owned by the taxpayer.) The lien for taxes on personal property attaches to all real property of the taxpayer as of the date the property is to be listed. Note that taxes on “classified motor vehicles” listed pursuant to G.S. 105-330.3(a)(1) do not become a lien on real property owned by the taxpayer.

  4. SET BACK VIOLATIONS - If there is a minor violation (less than 10% of the setback amount), then we can provide affirmative coverage to the lender, insuring against enforced removal of the minor violation.

  5. INSURING LEASEHOLD POLICY - The ALTA Leasehold Loan and Leasehold Owner’s Policies were withdrawn as approved ALTA forms effective October 13, 2001. Leasehold estates are now insured by including ALTA Endorsement 13 with an ALTA Owner’s Policy jacket and ALTA Endorsement 13.1 with an ALTA Loan Policy jacket.

Of course, the trick will be matching the right quick answer with the right quick question.  Please send any quick questions or answers that you come across for use in future updates. Submit your questions through our feedback area.

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