Pennsylvania Land Title Association Hails Passage and Enactment of Crucial Reform Bills

December 20, 2002

KING OF PRUSSIA, Pa., Dec. 20 /PRNewswire/ -- Homebuyers in Pennsylvania can expect smoother real estate transactions, greater access to mortgage funding and further protection of their properties with the recent passage of two important bills by the state's legislature.

With the signature of Governor Mark Schweiker last week, Acts No. 151 and 197 of 2002 became law in Pennsylvania, thanks to several parties concerned with streamlining real estate transactions and financing. The Pennsylvania Land Title Association (PLTA) took the lead in advocating changes in both the state's Mortgage Satisfaction Act and its Notary Public Law.

Act 197 addresses problems with mortgage satisfaction that have often impeded financing of real estate purchases, refinancing and other personal finance matters, said E. A. "Sandy" Dixon, Jr., Esq., Counsel with Stewart Title Guaranty Co. and leader of PLTA's ad hoc committee on the issue. "Our Association's goal was to protect homebuyers and the industries that finance homeownership. Along with the Pennsylvania Bankers' Association, PLTA helped create and supported passage of a bill that clarifies and consolidates rules concerning mortgage satisfaction, eliminates some risks homeowners faced, and removes needless burdens on county recorders of deeds."

A residential mortgage creates a lien on the mortgaged property. When a borrower pays off a mortgage - usually when refinancing or selling a property - the lender or its agent must record a document called a "satisfaction piece." Complex problems can ensue for the borrower, his mortgage company and title insurer if the satisfaction piece is not timely recorded in the county records office to indicate that the lien has been lifted.

Act 197, sponsored by Senator Edwin Holl, makes it easier to get satisfaction. It authorizes title officers or attorneys to record "Settlement Officer Satisfactions" from closings they conduct. It lifts some of the documentary and liability burdens on county recorders of deeds. While the period for recording the satisfaction has increased to 60 days, penalties for noncompliance remain stiff.

Bringing Notary Law into the Electronic Age

Since the state Legislature adopted the federal Uniform Electronic Transactions Act (UETA) in 1999, electronic commerce has become commonplace in many industries in Pennsylvania. However, the Legislature specifically deleted from the Pennsylvania Act the portions of UETA dealing with electronic notarization of documents, including property and financing documents which are essential to real estate transactions. Whereas notaries now impress their seals on paper documents, in coming years they will electronically add a "stamp" to files during online transactions and recording of documents.

"The Notary Public Act needed revision to reconcile existing notary law with the standards and practices notaries must adopt to function efficiently in the e-commerce era," said Jon Effner, Esq., VP and State Counsel for Commonwealth Land Title Insurance Company and chair of the Legislative and Judicial Committee of PLTA. "In particular, notaries needed the power to certify digitally encrypted signatures as equivalent to handwritten signatures on paper. PLTA responded to a request from the Pennsylvania Association of Notaries to add our support for the passage of House Bill 851, especially for provisions which would define how parties to a transaction can be affirmatively identified. PLTA made its position known to legislators, and our Harrisburg representatives communicated our position to House and Senate leadership." Sponsored by Representative Paul Clymer, House Bill 851 (which also includes provisions for continuing education of notaries) was passed by the House and reconciled with a similar Senate bill to become Act 151 of 2002.

For more information on PLTA or this legislation, call 610-265-5980 or visit

Source: Pennsylvania Land Title Association

Contact ALTA at 202-296-3671 or [email protected].