- January 27, 2014
- All Georgia Issuing Offices
- UNDERWRITING - Proper Witness Attestation - Reverse Mortgages - Security Deeds
We have experienced a significant number of claims where the lender on a reverse mortgage submits an instrument for recording with a defect in the form of attestation. Under Georgia’s race-notice recording system, a security deed has priority over subsequently recorded interests where the grantee has no notice and provides constructive notice of the contents of the instrument only if it is duly executed and properly filed for recording. O.C.G.A. §44-2-2. The example frequently seen on reverse mortgages is as follows:
Signed, sealed and delivered in the presence of:
_______________________________ __________________________ (Seal)
Unofficial Witness (Grantor Signature)
STATE OF }
COUNTY OF _____________________}
On _______________ before me, ________________________________(here insert name and title of the officer), personally appeared_____________________________________________________________ _____________________________________________________________________ _____________________________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
The above form is incorrect. It is missing a second unofficial witness. Even if accepted for recording, this security deed is NOT afforded the protections of constructive notice and priority because it is not properly attested according to Georgia law. If not corrected, this security deed is subject to avoidance by a bankruptcy trustee or subject to attack by junior interests in the property. See U.S. Bank v. Gordon, 289 Ga. 12, 709 S.E.2d 258 (Ga. 2011); Wells Fargo bank v. Gordon, S12Q2067 (Ga. Feb. 2013). You can find the proper attestation forms, which meet the technical requirement for constructive notice and priority, in Virtual Underwriter at GA WITNESS ATTESTATION 1. Issuing Agents may also need to contact their closing attorney or the lender directly to obtain an amendment to any closing instructions used in Georgia which require any other form of execution and witness attestation.
All Issuing Agents must examine the signature page of any deed to ensure it is properly executed by the grantor and properly attested by two witnesses in accordance with Georgia law before the instrument is sent to record and upon the return of recorded instrument from the Clerk of Court. To insure the security deed and marketable title, Issuing Agents must require the following:
1. Requirement of Execution
All deeds of conveyance, including mortgages and security deeds, must be signed in accordance with Georgia’s execution and attestation requirements when the property is located in Georgia. O.C.G.A. §44-2-21. This is true even if the deed is prepared by or executed by the maker in another state. It is also important to verify that all parties on title execute the security deed and each signature is attested in the proper form.
2. Attestation of Two Unofficial Witnesses
Attestation is the act of witnessing the grantor’s signing of a deed by a subscribing witness. Georgia law requires all deeds to be attested (i.e. witnessed) by two people who actually see the grantor execute the deed and who subscribe their respective names to the deed as a witness to that fact for the deed to be duly executed and properly admitted to recording. O.C.G.A. §§44-2-14, 44-5-30, 44-14-61.
3. Attestation by Official Witness
Georgia law requires two witnesses must either be attested to or acknowledged by a notary public or an officer as prescribed under O.C.G.A. §44-2-15. The form of the “official witness” is unique to Georgia. The most common form used is where one of the witnesses is a notary public. When a notary public acts as one of the witnesses, the notary must sign and also affix the notary’s seal. The notary public must confirm the identity of the document signer, oath taker, or affirmant based upon personal knowledge or on satisfactory evidence. O.C.G.A. §45-17-8.
Standard acknowledgments are seldom used here because of the requirement that a deed must be attested by two witnesses. An acknowledgement is the act of the grantor in going before a competent officer and declaring the instrument to be his deed. Where a notary acknowledgment is used, two unofficial witnesses are still required for proper attestation. O.C.G.A. §§ 44-2-21, 44-5-30.
FIXING DEFECTIVE ATTESTATION IN DEEDS
A defect arises when a notary signs but fails to affix the notary’s seal or fails to sign. The defect can also arise when the deed is missing the unofficial witness entirely or where the notary may sign and affix the seal as the official witness and also signs the unofficial witness line.
We require something to be recorded in the chain of title to fix a defective execution or attestation before the default of the borrower or filing of a petition in bankruptcy. In these cases, a security deed with a defective attestation or acknowledgement may be corrected with a correction Security Deed or a modification agreement. Georgia Revised Title Standards §14.4. The corrective security deed or agreement must be signed by the grantor and properly attested by witnesses. An affidavit may also be recorded proving the execution at the closing and delivery of the Security Deed in accordance with O.C.G.A. §44-2-18. The affidavit should be signed by the grantor and attested by an unofficial witness and official witness. In some cases, title may need to be established by declaratory action reforming the instrument or other legal proceeding. If you encounter a deed in the chain of title without proper execution or attestation, please contact an underwriter before agreeing to insure a subsequent transaction.
Once a bankruptcy is filed or the borrower is in default, it is too late to clean up title. Any attempt may be seen as a violation of the automatic stay in bankruptcy and may be subject to attack by intervening creditors. If there are any intervening liens, bankruptcies, or transfers have been filed by or against the grantor, please contact an underwriter before proceeding to correct or insure the transaction.
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