Title Companies as Child Support Collectors?
Wednesday / October 31, 2007
Child support liens must be paid when real estate is
sold.
The Central Valley (California) Business Times has
published a puff piece headlined "Title
companies say they are a prime collector of
child support." According to the article, the
California Land Title Association reports that
title companies collected more than $49 million
in delinquent child support payments in the last
fiscal year and more than $320 million since
July 2003.
The Association's Executive Vice President, Craig Page, continued: “Not only do title insurers undertake an exhaustive search of public records to protect property owners, they coordinate with government agencies to identify and recover delinquent child support, spousal support and tax payments that would otherwise have gone uncollected.”
To hear Mr. Page tell it, title companies are out there on the front lines helping custodial parents collect past-due child support. But here's how it actually works: Past-due child support becomes a lien on real property. In some states, the lien can even attach to a homestead. When the real estate is sold, the title company issues an insurance policy that the seller actually owns the property and also sets out the liens against the property. If there is an outstanding lien - including a child support lien - then the purchaser or lender requires that the lien be released as part of the property sale so that the purchaser receives unencumbered title.
Although title companies uncover child support liens that must be paid upon selling property, they do this as part of their business, not out of the goodness of their hearts. It's a bit disingenuous to claim that title companies are leaders in child support enforcement.
If I am counting correctly, it took the Treasury Department a bit more than one year and eight months to implement a statutory change.
The Association's Executive Vice President, Craig Page, continued: “Not only do title insurers undertake an exhaustive search of public records to protect property owners, they coordinate with government agencies to identify and recover delinquent child support, spousal support and tax payments that would otherwise have gone uncollected.”
To hear Mr. Page tell it, title companies are out there on the front lines helping custodial parents collect past-due child support. But here's how it actually works: Past-due child support becomes a lien on real property. In some states, the lien can even attach to a homestead. When the real estate is sold, the title company issues an insurance policy that the seller actually owns the property and also sets out the liens against the property. If there is an outstanding lien - including a child support lien - then the purchaser or lender requires that the lien be released as part of the property sale so that the purchaser receives unencumbered title.
Although title companies uncover child support liens that must be paid upon selling property, they do this as part of their business, not out of the goodness of their hearts. It's a bit disingenuous to claim that title companies are leaders in child support enforcement.
If I am counting correctly, it took the Treasury Department a bit more than one year and eight months to implement a statutory change.
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