Hawaii, Missouri and Rhode Island Legislative Update

Hawaii, Missouri and Rhode Island Legislative Update

The Hawaii legislature recently amended the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), effective July 1, 2016.  The Missouri legislature recently amended its laws regarding title requirements, effective August 28, 2016.  The Rhode Island legislature recently amended the law regarding mortgage foreclosure and sale by adding a new section, effective July 6, 2016.




The principal place of business and each branch office of the mortgage loan originator company must be open for business to the public during posted business hours, at least some of which must be during regular business hours.   “Regular business hours” is defined as Monday through Friday, between the hours of 8:00 a.m. and 4:30 p.m., excluding state holidays.




A title insurer, title agency, or title agent is not authorized to provide services as an escrow, security, settlement, or closing agent in a residential real estate transaction unless as part of the same transaction the title insurer, title agency, or title agent issues a commitment, binder, or title insurance policy, and closing protection letters have been issued protecting the buyer’s, lender’s, and the seller’s interests.  If a title insurance policy is not being issued by the title insurer, title agency, or title agent, the title insurer, title agency, or title agent must give written notice to the affected person in a title insurance commitment or on a form approved by a rule promulgated by the Director of the Department of Insurance (“Director”) that the person’s interest in the closing or settlement is not protected by the title insurer, title agency or title agent.


It is unlawful for any title insurer, title agency, or title agent to engage in the handling of an escrow, settlement or closing of a residential real estate transaction, unless the escrow handling, settlement or closing is conducted or performed in contemplation of and in conjunction with the issuance of a title insurance policy and (previously or) a closing protection letter.  If a title insurance policy is not being issued by the title insurer, title agency, or title agent, prior to the receipt of any funds, the title insurer, title agency, or title agent must clearly disclose to the seller, buyer or lender involved in the escrow, settlement, or closing, that no title insurer is providing any protection for closing or settlement funds received by the title agency or agent.


A title insurer is expressly authorized to issue closing or settlement protection letters (and to collect a fee for such issuance) in all transactions where its title insurance policies are issued and where its issuing agent or agency is performing settlement services and shall do so in favor of the applicable buyer, lender, or seller in all residential real estate transactions.




The following definitions apply:

  • “Mortgage loan” means a loan to a natural person made primarily for personal, family or household purpose secured wholly or partially by a mortgage on residential property.
  • “Residential property” means real property on which there is a dwelling house with accommodations for no more than 4 dwelling units and occupied, or to be occupied, in whole or in part, by the borrower; provided, however, that residential property is limited to the principal residence of a person; provided further, that it shall not include an investment property or residence other than a primary residence, and that it shall not include residential property taken in whole or part as collateral for a commercial loan.


In all circumstances in which an offer to purchase either a mortgage loan or residential property is made by an entity with a tax-exempt filing status under the Internal Revenue Code, or an entity controlled by an entity with such tax exempt filing status, no mortgagee shall require as a condition of sale or transfer to any such entity any affidavit, statement, agreement or addendum limiting ownership or occupancy of the residential property and, if obtained, such document shall not provide a basis to avoid a sale or transfer nor shall it be enforceable against such acquiring entity or any real estate broker, mortgagor or settlement agent named in such affidavit, statement or addendum.