Jackson Jambalaya

House bill #384 (see note at the bottom) will result in less choices, more delays in closing and higher cost for services rendered and less satisfaction to all parties concerned if it becomes law.

Many a lawyer decided to try closing loans after tort reform was enacted. They soon discovered that the cost involved was prohibitive (Real Estate Law premiums are the highest in terms of errors & omissions policies for lawyers) due to the constant changes required by the lender. Other factors making it more expensive for the lawyer include the loss of income from other areas of practice due the time required for a problematic closing (which 5 out of 10 are).
An attorney may decide to reschedule a closing outside of the 24 hour window in which a loan commitment is good, thus requiring the lawyer or his staff to spend more time preparing a closing package as it has to be redrafted. The lawyer may have to pass up more lucrative work or cases because he has already committed to a closing time with the Realtors and borrowers. These are just some of the reasons that closing mortgage loans have a higher cost to the lawyer than other areas of practice.

Under this bill a paralegal can't close the loan as only the lawyer's hand may touch the paper work. This will cause a backlog in the processing and closing of other loans as other buyers and sellers have to wait for the loan to close. This will create much uncertainty in an industry already reeling from the subprime crisis. Agents and loan officers won't be able to speak with any degree of authority as to when a loan will close. Creating chaos where there is now none.

This bill is a grab by certain attorney members of the legislature through legislative fiat to dismantle the title closing industry and cobble the pieces together for their own aggrandizement at the expense of an industry and borrowers.

As far as I know, there have been no escrow or title closing companies has been cited as participants in the mortgage fraud that has cratered the real estate industry. (Kingfish note: It has actually been lawyers, not closing agents that have gone to jail recently in local mortgage fraud cases where the closing party was involved) The present set up has served all parties to the closing procedure well. This is another example of an insider using his elected position not to solve a problem but to import jobs to his profession and industry at the expense of the public's well-being.

This bill seems to be the hallmark of the legislation coming out of the legislature this session. The shameless examples abound. Legislators propose suspending eminent domain rules and due process in the Jackson State University area as they try to change the rules so the school won't be inconvenienced with timelines that might affect their plans and bottom line. The brazen attempt by some coin-operated legislators to extend the monopoly utilities companies have in this state to include the right to seize private property (cash out of pockets) of customers for future services that may never be rendered while the utility makes money off of the additional money through interest (that should belong to the taxpayer) while giving no ownership to taxpayers.

This is the same legislature that assured us after the beef plant debacle they had learned their lesson as they sat before us in sack cloth and ashes with all the contriteness a miscreant could muster. These three pieces of legislation represent the unbridled gall of the legislature. One should not be surprised at their audacity as they learned too well after last year's elections when the voters of this state did not send a clear message by throwing the authors of the beef plant fiasco out on their ears. These elected officials now feel bullet proof to now foist these type of bills upon us.

Kim Wade

Kingfish note: House Bill #384: Will change the current law from allowing a current employee of an attorney to handle a mortgage loan closing to requiring that the closing be handled by the attorney himself.

Bill: http://billstatus.ls.state.ms.us/2008/pdf/history/HB/HB0384.xml
Current Law: http://www.mscode.com/free/statutes/73/003/0055.htm