07 Jun Colorado and Maryland Legislative Update
The Colorado legislature recently amended Colorado law governing notary publics, effectiveAugust 8, 2012. The Maryland legislature recently enacted legislation governing indemnity mortgages and real property taxes related to a foreclosure sale and amended laws governing interest payable on escrow accounts. The legislation was effective June 1, 2012.
COLORADO HOUSE BILL 12-1274
At the time of notarization, a notary public must sign his or her official signature on every notary certificate or, in the case of an electronic record, a notary public must affix his or her electronic signature.
Under or near his or her official signature on every notary certificate, a notary public must clearly and legibly stamp his or her official stamp. The official notary seal must be rectangular. The official notary seal must contain only the outline of the seal and the following information contained within the outline of the seal:
- The printed legal name of the notary;
- The notary’s identification number, the notary’s commission expiration date, the words “STATE OF COLORADO”; and
- The words “NOTARY PUBLIC”.
The fact that a notary attests to an instrument relating to real property by affixing a notary seal that is not in compliance with Colorado law does not render the instrument or the attestation invalid or ineffective, nor does it render a title unmarketable.
A notary who obtained an official seal before August 8, 2012 may continue to use his or her seal until renewal of his or her notary commission.
A notary public must provide, keep, or use a seal embosser.
The following provisions have been deleted:
Under or near such notary’s official signature on every notary certificate, a notary public must write or stamp “my commission expires (commission expiration date)”.
Every notary public may provide, keep, and use a seal embosser engraved to show the notary’s name and the words “NOTARY PUBLIC” and “STATE OF COLORADO”. The indentations made by the seal embosser must not be applied on the document where the notary certificate appears in a manner that will render illegible or incapable of photographic reproduction any of the printed marks or writing.
MARYLAND SENATE BILL 1302
“Indemnity mortgage” includes any mortgage, deed of trust, or other security interest in real property that secures a guarantee or repayment of a loan for which the guarantor is not primarily liable.
Except as provided below:
- Secured debt with respect to an indemnity mortgage is deemed to be incurred for purposes when and to the same extent as debt is incurred on the guaranteed loan; and
- The recordation tax applies in the same manner as if the guarantor were primarily liable for the guaranteed loan.
The above provisions do not apply:
- To the extent that recordation tax is paid on another instrument of writing that secures payment of the guaranteed loan; or
- To an indemnity mortgage that secures a guarantee of repayment of a loan for less than $1 million.
MARYLAND SENATE BILL 123
“Instrument of writing” means a written instrument that:
- Conveys title to or creates or gives notice of a security interest in real property; or
- Creates or gives notice of a security interest in personal property.
“Residential property” means real property improved by a dwelling unit that is designed principally and is intended for human habitation. Residential property includes a residential condominium unit and a unit in a cooperative project.
“Tax” means any tax, or charge of any kind due to the State or any of its political subdivisions, or to any other taxing agency, that by law is a lien against the real property on which it is imposed or assessed, and includes interest, penalties, and service charges.
Except as provided below, if residential property is purchased at a sale in an action to foreclose a mortgage or deed of trust on the residential property, the purchaser must provide a copy of the court order ratifying the foreclosure sale to the supervisor of assessments (the “supervisor”) for the county in which the residential property is located by the later of:
- 60 days after the entry of the court order ratifying the foreclosure sale; or
- If a motion is filed appealing the ratification order before the expiration of 60 days, 30 days after the entry of a court order that resolves the motion without nullifying the ratification order.
The above provisions do not apply if:
- An instrument of writing transferring the residential property has been recorded in the land records of the county in which the residential property is located before the expiration of the time period set forth above; or
- The foreclosure sale is subject to:
- A pending appeal of the ratification order;
- A bankruptcy stay; or
- An unexpired right of redemption in favor of the United States or any agency or Department of the United States.
The supervisor will provide a receipt to the person providing a copy of the ratification order.
If a copy of the ratification order is not provided to the supervisor as required, any reduction in property tax received by the residential property because of its status as an owner-occupied principal residence from the date of the entry of the ratification order until the earlier of the receipt by the supervisor of a copy of the ratification order or the recordation in the land records of an instrument of writing transferring the property to a third party will remain due and collectible as a property tax.
MARYLAND HOUSE BILL 533/Senate Bill 507
The interest rate, which must be paid on a escrow account for a first mortgage or first deed of trust on residential real property is an annual rate not less than the 6-month average dealer bid rate on nationally traded certificates of deposit, as published by the Federal Reserve in “Selected Interest Rates (Daily) – H.15”, as of the first business day of the calendar year. Previously, the interest rate on an escrow account was 3% per annum.
Interest on the funds in an escrow account will be:
- Adjusted, if applicable, as of the first day of each calendar year to reflect the rate to be paid during that year;
- Computed on the average monthly balance in the escrow account; and
- Paid annually to the borrower by crediting the escrow account with the amount of interest due.