Gwendolyn Hall Brady, director of the Division of Banking, Insurance and Financial Regulation, and Dolace McLean, general counsel for the Office of the Lt. Governor, presented a scenario to senators on Tuesday they said happens too often.
Brady and McLean asked senators to imagine a scenario in which a Virgin Islander pays off her mortgage and has clear ownership of her home. She picks up the documents at the bank. But she does not file the documents with the Lt. Governor’s Office Recorder of Deeds. The mandatory home insurance that went with the mortgage ends, and she does not renew it.
Then, along comes a hurricane and the roof is ripped off her house. She goes to a federal agency for help. She does not get any help, because an official record of her being the sole owner of the house does not exist yet. And then there is the issue of no longer having insurance. She has problems, big problems.
Brady and McLean advocated at Tuesday’s Senate Finance Committee hearing for the adoption of the Uniform Residential Mortgage Satisfaction Act proposed by Sen. Oakland Benta. Brady said the proposed legislation “is a consumer protection bill because it seeks to protect a consumer’s financial interest in his or her home, which is very important because a home is the most valuable asset an individual owns.”
“The Division supports this bill because it places the responsibility on the mortgage lender [and not the mortgagor] for recording the release of mortgage with the Recorder of Deeds,” Brady added.
If the release of mortgage is not recorded with the Recorder of Deeds, a property owner will also run into problems selling the property, getting a second mortgage or when the owner dies and the property is to be distributed to heirs. An outstanding mortgage can also falsely show up on credit reports.
Sen. Myron Jackson said the passage of the act would bring the standards of the territory up to par with national ones.
Sen. Allison DeGazon said the act is “the type of bill that improves the quality of life of territory residents.”
The Finance Committee voted unanimously to forward the bill to the Rules Committee. Sen. Kurt Vialet said amendments suggested by Brady can be made in the Rules Committee.
Attending the hearing were Sens. DeGazon, Dwayne DeGraff, Novelle Francis Jr., Donna Frett-Gregory, Benta, Jackson, Janelle Sarauw and Vialet.