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Once Again, the news for the Title Insurance Industry is not good. Todays news around the country today reads like a bad novel for custodians of enormous sums of mortgage money.
FORT WAYNE, INDIANA According to terms of a plea agreement, Garretson must transfer any interest he has in any bank accounts in his name toward making restitution, and he must provide a complete accounting of his assets to the Indiana Secretary of State’s Securities Division and the Indiana Department of Insurance. More information at the Journal Gazette.
ANNAPOLIS, MD Mortgage broker, David Wehrs, moonlighted for the past several years as a financial adviser misappropriated more than $2.3 million of his clients’ money to buy and sell stocks for his own personal gain, according to the U.S. Attorney’s Office and the Securities and Exchange Commission. When Wehrs ran out of money, he pulled $630,611 from his related escrow account at Maryland Title, prosecutors said. The money was supposed to be used to pay down individual mortgages. Chicago Title, Wehrs’ title insurance company, ultimately paid off the escrow debt at no cost to the homeowners, prosecutors said. See full article here at HometownAnnapolis paper.
ATLANTA, GEORGIA – Trent Edward Wright admits that while acting as closing attorney for a number of loans, he prepared documentation falsely showing that the loans were secured by a first lien position in property owned by the borrower, when in fact he knew that the borrower did not have clear title and that the lenders were not receiving a first lien position security interest. He also issued false title insurance opinions and policies in connection with these loans. See full info at leagle.com
Here is an amazing foreclosure tale. The link is the actual lawsuit filing by Deutsche Bank against Bank of America, which was the Trustee for a $1.7B credit line for DB, and another $476MM for BNP Paribas. In the mix are Taylor Bean Whitacker (since suspended by FNMA and FHLMC,) Ocala Funding and Colonial Bank (which failed Aug 2009.) The lawsuit alleges complete failure of any controls for money flow and document management, particularly missing mortgage notes, mortgages and assignments. I found the case to be a perfect case study in what I would title “ How to Destroy Faith in the U.S. Mortgage Backed Security System.”
I just got a pre-declined credit card in the mail.
I ordered a burger at McDonald’s and the kid behind the counter asked, ”Can you afford fries with that?”
CEO’s are now playing miniature golf.
If the bank returns your check marked ”Insufficient Funds,” you call them and ask if they meant you or them.
Hot Wheels and Matchbox stocks are trading higher than GM.
McDonald’s is selling the 1/4 ouncer.
Parents in Beverly Hills fired their nannies and learned their children’s names.
A truckload of Americans was caught sneaking into Mexico .
Dick Cheney took his stockbroker hunting.
Motel Six won’t leave the light on anymore.
The Mafia is laying off judges.
Exxon-Mobil laid off 25 Congressmen.
And, finally…
I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security, retirement funds, etc., I called the Suicide Lifeline. I got a call center in Pakistan , and when I told them I was suicidal, they got all excited, and asked if I could drive a truck.
The Insurance Journal has a must read article on the recent US Housing Financial Services Committee. It would appear that the white house is looking at far-reaching authority for Insurance companies, and yes, that includes title insurance companies. In the author’s opinion, if we value our independence as an individual title company, I strongly suggest that we endorse the NAIC position that Insurance regulation belongs with each state, not the Feds. We do not need another layer of regulators. Let’s just work with the ones we have. If we don’t speak up, we will pay the consequences.
The National Association of Insurance Commissioners (NAIC) emphasized that the office should link the state and federal regulatory systems but not put a damper on state regulation of insurance. According to Therese M. (Terri) Vaughan, Ph.D., CEO of the NAIC, “A formal federal interface is appropriate, but the current ONI proposal strays too far from past legislation that included important safeguards against preemption of state laws and consumer protections.”
For those not in attendance at the National Association of Land Title Examiners and Abstractors annual conference in Charlotte, NC, you are missing some great contacts and networking, as well as educational seminars and round table discussions.
In spite of a few hiccups (President Lynn Hammett had to defer to Vice President Debi Merrill because of the flu) we are moving forward.
So far we have:
- Assembled a very impressive group of about a dozen trainers to teach the NALTEA National Certified Abstractor course – step one in receiving the National Certified Abstractor (NCA) and National Master Abstractor (NMA) Designations;
- Produced ideas for more educational opportunities in an Education Committee meeting;
- Heard Committee Reports from the Standing committees along with half a dozen introductions to those running for the NALTEA Board of Directors;
- Had explained fascinating information on Criminal Records Searching by a former Private Eye;
- Listened to John H. Thomas, JD as to the importance of involvement in Politics to our abstracting and title businesses. He and William Woodall giving us a unique insite into the working of business in government’
- Participated in Review Sessions about National Abstracting in order to prepare for those who wish to achieve the NCA or NMA designations;
- Had Round Table discussions on the future of the industry;
- Learned about opportunities in Environmental Lien Searching…
Additionally the Eastern Carolina Barbeque food and cameraderie from folks across the U.S. have been magnificent! We Look forward to even more tomorrow… 
Wish you were here to join us!
The New York State Insurance Department has announced the formation of a special Unit to fight title insurance crimes. The News Release cites the recent arrests of two men accused of stealing nearly $6 million in title insurance premiums, and other cases involving complex criminal real estate schemes.
Superintendent James J. Wrynn said “Title insurance agents, in addition to providing title insurance, hold large sums of money including mortgage recording fees, real estate taxes and other fees related to commercial and residential real estate transactions. The lure of these funds, combined with the downturn in the economy, appears to be fueling an increase in title insurance related crimes,”
The unit will be organized within the New York State Insurance Department’s Frauds Bureau.
I sometimes wonder about all the confusion in the title industry. Our customer is asking for a “one-Owner Search.” Does that customer have any idea what he is getting? Does he even have any idea what he is asking for? Please answer this 10 Question Survey to see what all the fuss is about. Are we consistent? Let’s get some info. and I will feed back results.
Connecticut Insurance Commissioner Thomas Sullivan represented the NAIC in addressing the House Financial Services Committee on the proposed “Financial Stability Improvement Act.” This House measure would include regulation of insurance firms deemed large enough to be a widespread systemic risk. Sullivan said the bill would bring about “redundant, overlapping responsibilities” and cause “policyholder confusion, market uncertainty, regulatory arbitrage, and a host of other unintended consequences.” He said new regulation should not replace “the current, coordinated, national system of state-based insurance supervision.” Read the full story at property-casualty.com
Once again, Darity Wesley of Privacy Gurus Offers useful information on Privacy. This time on social media. Per Darity:
“Here’s a cocktail fact for you – did you know that social media has taken over pornography as the #1 activity on the Internet? You probably participate in at least one type of social media, a website that is based on participation and user-generated content, in some form personally and/or professionally.
So, now let us count the ways you may be engaged in the social media revolution- social networking websites like Facebook, LinkedIn, MySpace and Twitter; social bookmarking and news sites; Nings that are centered on user interactions; and other myriad technologies and practices that we use to connect with each other and share opinions, insights, experiences and perspectives with each other.
With all of this incredibly accessible information and ability to interact, have you noticed how the borders between our public and private lives are blurring? Do you ever wonder whether or not to post a cute family photo to share with your network of family or friends? How about expressing your real opinion about someone or something? These are good questions to stop and ask yourself before posting anything online. The best rule to follow is: Anything you post online is publicly available information that anyone in the world can access.
State and federal legislators are reacting to this explosion of privacy issues and online privacy has become a higher priority on Capitol Hill. There is a plethora of bills in legislatures nationwide addressing issues such as: Online age verification, creating false online profiles, and requiring warnings that what you post may be used by anyone, anywhere. Also, in Pennsylvania and California the first lawsuits for invasion of privacy for online issues have been tried, and both cases were lost. It’s definitely a new frontier out there for privacy on the Internet and the law is just arriving in our global town.
Free speech is being tested in this cyber-jungle too. People have the right to commercial use of their own images for publicity (think pictures on Facebook). Defamation of character (false statements about a person presented as facts intended to harm that person) is still illegal- and it travels like wildfire on our instantaneous global networks like Twitter. While defamation is a great big no-no, you do have the right to state your opinions.
Business is adopting social media at a wild pace, particularly relationship-oriented industries like real estate. Unfortunately, home listings are getting spread around everywhere, which is not really a good thing, and there are few social media policies in place to protect both business and individual rights.
It is both a business and personal imperative to stay aware and alert about what you post online. Remember, once you post it you can’t ever take it back, even if you crossed your fingers behind your back when you did.
Darity Wesley is CEO and Legal Counsel for Privacy Solutions, Inc. a San Diego based consulting firm. You can always reach Darity at Darity@PrivacyGurus.com or 619-670-9462.
It would appear that a One-Owner Search is Not a One-Owner Search, or is it?
Results of One Owner Search Survey Questions were surprising. Depending on who you order from, your results will be different. Results as follows:
1. Does your One-owner search include a copy of the Deed?
Always 93% Separate Charge 7%
2. Does your One-owner search include current taxes?
Always 89% Never 4% Separate Charge 7%
3. Does your One-owner search include Delinquent Taxes?
Always 93% Never 1% Separate Charge 6%
4. Does your One-owner search include a 24 month ownership record?
Always 65% Never 9% Separate Charge 26%
5. What Mortgages/Deeds of Trust do you show on a one owner search?
ALL 37%
Mortgages recorded since current owner purchase 47%
We search back 2 owners 3%
Depends on client 13%
6. Do you do FULL name searches on the record owner?
Yes 92% No 1% Depends on client 7%
7. Which of the following names do you and your customers use to order a search?
(Allows more than one response % is of those who answered yes compared to total responses.)
One Owner Search 71%
Two Owner Search 27%
Owner and Encumbrance Rpt 40%
Last Record Owner Search 32%
Deed Search 25%
Property Report 40%
Title Report 33%
8. On a one owner search, do you run FULL name searches on all owners of record for the full time frame the liens could attach- for example do you search ALL owners of record for the last 10 yrs and 30 days for a Federal Tax Lien?
We do not search names 1%
We search only current owner 62%
We search back 2 owners 16%
It depends on customer 29%
9. Which of the following would you search on an O&E?
We do not do O&E’s 17%
Mortgages and DOT 62%
Full name searches on current owner only 54%
Full name searches per #8 above 37%
Taxes 65%
Easements 35%
Restrictions 32%
10. What state do you do most of your work in?
34 states listed
I am pleased to announce a new seminar “Navigating the Condo Documents” which explains the condominium documents! I am excited about the course as, believe it or not, it is fun, interesting and makes a very complicated topic make sense in a way that will help Board Members and Association Members understand the duties and obligations.
In particular, the Trump order of Laws and the order the documents have priority over each other is an important concept for those on a BOD. A clear explanation of terms so that people understand common elements, limited common elements, appurtenances and other key words is essential to running an association. For more information please contact us. The course is designed to explain the requirements of the new Florida Law for BOD memberss and for interested Association members.
DENVER – He bought his first home, spent $30,000 fixing it up, and now, six months later, Jonathon Kyte has learned the home doesn’t belong to him. According to the City and County of Denver, Jonathon owns the dump, next door. He found out about the mistake almost by accident when he received a map which showed the unit he’s living is actually unit No. 4. “I froze. My wife and I were just speechless,” Kyte said. Kyte owns the deed and title to unit No. 5. Jonathon blames the Coldwell Banker listing agent for the mistake. She marketed the property and provided the key to the unit Jonathon and wife have been living in. He called the listing agent again and again, but she wouldn’t return his calls. He also called the title company, “Colorado American Title,” and an employee promised to get back to him, but never did.
So Jonathon called FOX 31 News. We confronted the listing agent’s supervisor, but he would not comment on camera. He said their lawyers were looking into the situation. Jonathon is now considered a squatter in unit No. 4, and the people who were so willing to sell it to him, are now unwilling to help.
This is very exciting! Google has opened Google Scholar. We can now search by topic, case law, you can add date and author info to your search. A great tool for the Real Estate Industry with a huge source of information for the title industry. Pluses:
- Search by State is available
- It doesn’t just link to FindLaw or Cornell, but is much broader
- it has complete original text.
Don’t think this product is going to hamper the incredible resources of Lexis or Westlaw in the near future, because they are excellent at organizing, commenting, and providing information beyond simple access to courts and government.: Weaknesses Google needs to overcome:
- There is no verification whether or not an opinion has been overruled, vacated, distinguished, etc.
- No hyperlinks exist to statutes, codes, regulations, etc., referred to in the opinions, although there are hyperlinks within cases to other opinions.
- Case law goes back only about 80 years for federal cases and somewhat more than 50 years for state cases.
But stay tuned, Google has a reputation of figuring out what the consumer wants, and my bet is they will be working to fix current weaknesses
A suit by title insurers involves a $2.8 billion (yes, with a B) Las Vegas financing package. Construction overruns, a failed effort to sell condo-hotel units in Vegas and the economic market felled the Vegas project. The suit by Fidelity National alleges that a myriad of holding companies are hiding owners from dutifully paying costs. Details at Miami Herald
When you go to the Ideal mortgage, dba Lend America Website, you now see:
“Effective immediately, the company has ceased its formal operation and loan origination capability.” Reportedly the company immediately laid off 600 workers.
According to the HUD Release FHA and GNMA have revoked underwriting approval for poor underwriting and false certifications. Ideal Mortgage Bankers, doing business as Lend America and Lending Key (”Ideal”). The action prevents Ideal from originating and underwriting new FHA-insured mortgages or from participating in the FHA single family insurance program. In addition, GNMA has also defaulted Lend America so that Lend America will no longer be able to issue GNMA mortgages. The action taken follows a Quality Assurance review that found Ideal violated the following HUD/FHA requirements by:
- Using conflicting information in originating and obtaining HUD/FHA mortgage insurance;
- Submitting false certifications that an employee of the lender obtained directly from the borrower the information contained in the application;
- Approving loans that did not meet the minimum credit requirements;
- Failing to adequately document the stability and/or source of income used to qualify mortgage loans;
- Failing to adequately document the source of funds used to close the loan or satisfy various omitted liabilities;
- Omitting liabilities from the underwriting analysis without supporting documentation;
- Approving loans with ratios that exceeded HUD standards without significant compensating factors;
- Exceeding HUD requirements when calculating the maximum insurable mortgage;
- Failing to process a loan in accordance with HUD policy on employee loans;
- Closing a loan with an excessive mortgage broker fee paid to an approved FHA Loan Correspondent;
- Failing to provide the required documentation to support IMB’s decision to approve the mortgage loan;
- Submitting false certifications to HUD in connection with the submission of its Yearly Verification Report.
Certainly a sign of the times, a classic example that has put us where we are today economically. In the author’s opinion, it shows that HUD needs much better oversight, and it points out that we have allowed the proverbial fox to guard the hen house, as thousands of “authorized” lenders now underwrite loans and also oversee taking care of the loans gone bad. How can the FHA recognize problems before they without more oversight?
Anyone who knows me, knows that I am a bit “quircky” about title insurance. A Geek really. I keep track of fun survey descriptions and silly names that have been recorded. I love the history of surveys for example. My favorite description (to date) begins and ends “At the Stump of the tree, where Philo Blake killed the Bear.” Must have been talk of the town to remember THAT tree. I have actually read the original PLSS instructions – fascinating!
But now comes a really fun article about survey history at StraightDope with such gems as this
“ In the 1770s a party-hearty type named Collins led a team that surveyed the boundary between Quebec and Vermont. On one 22-mile stretch, a fifth of their expenses went for booze. The result, an international commission later acknowledged, was “very far from a straight line.”
According to ALTA’s preliminary Third-Quarter Market Share Report, the title insurance industry generated $2.51 billion in premiums during the quarter. This is a 1.4 percent increase compared to the $2.48 billion generated during the third quarter of 2008. The industry had endured 13 consecutive quarters in which title premiums written declined from the prior year’s equivalent quarter. See more information at at
Pulte Homes, one of America’s largest builders, has signed an agreement with Real Estate Disposition, LLC (REDC) to acquire the Commerce Title retail title insurance agency. The Commerce Title brand, retail branch network, and certain additional support assets are included in the sale. Subject to regulatory and licensing approvals, the sale is expected to close in the first quarter of 2010. See more at Newswire.
According to the Insurance Journal, time is running out once again for the National Flood Insurance Program, set to expire on Dec. 18. Congress passed a short-term extension in September that moved the expiration deadline for NFIP to Dec. 18, 2009. But if Congress fails to act again this week, the main source of protection against flooding for more than five and a half million homeowners could be in jeopardy, potentially costing the government and taxpayers billions of dollars.
Insurers are urging Congress to pass an extension to the NFIP before it’s too late.
A very expectant mom and husband who were at the table trying to buy their dream home. Picture this: baby due any minute and movers in the driveway. The real estate agent and the sellers thought they had worked out a deal for a short sale with their lender. But, at the table, the title company closer handed the seller yet another form to sign. This one authorizes the lender to continue to hold the sellers responsible for the shortfall for the next 7 years – a surprise to the sellers. Needless to say, the sellers walked away, telling the lender to go ahead and foreclose. The buyers were stuck.
What is it with short sales? I wonder what percentage actually close as a short sale rather than a foreclosure. Short sales do not reflect legitimate values in my opinion. They depress the market, giving false hope to buyers. They purport to have “deals worked out” but don’t. Short sale listings act as bogus numbers that really hurt local neighborhoods because the numbers are bogus.
Think about it. Fair market value requires certain fundamentals be present:
- First, they require “marketable title.” Short sales don’t have that. They require the approval of a lender that may or may not go along with the proposal. They may even require the approval of a second mortgage lender, and maybe even a third… Good luck trying to maneuver that through to reach a sale.
- Next, fair market value is founded on buyers and sellers being under “no duress or undue pressure” to buy or sell. Anyone losing their home in foreclosure is obviously under duress. Losing the roof over one’s head, the home where their children sleep at night- who wouldn’t worry? And what about wrecking their credit rating. They lose sleep over it.
- Legitimate listings and sales of fair market value are “arms length transactions.” Not so in short sales. Many purported buyers are investors with cash who are picking the skeletal bones of people in distress.
- Legitimate fair market value requires available mortgage credit. With so many bad loans on the books, lenders are tightening their standards. Too few can qualify to borrow. People who would like to buy no longer have the financial ability to act on their desire, so demand is down.
- Legitimate sales values require normal market demand. With the highest unemployment we have seen in decades and fear of holding onto one’s job, the demand is skewed. Too few can afford to buy or are willing to risk taking on new obligations. Foreclosed homes are being scarfed up for cheap rentals, changing the structure of neighborhoods.
Further, while MLS appears to have many “listings,” many of them are not legitimate. After all, short sales don’t have marketable title. The deal still has to be worked out with the lender. The sellers CAN’T sell it without the additional condition of lender approval. That is huge!
I think listing agents are being unfair in disclosing short sales. I don’t think the average buyer understands the difference between a listing and a short-sale listing. They think they bought a house for an “unbelievably low price” and they get to closing only to find out they don’t have a deal! The lenders are in charge – they agree, or they foreclose and the buyers are back to square one with no place to live. I don’t think the market can return to Fair Value until the short sales and foreclosures are cleared off the books. At the rate we are going, it will be years.
A Forest Lake, MN couple is involved in a theft of their refinance money. More than $400,000 supposed to pay off their old mortgages was reportedly converted to personal use by Jason Fischer, co-owner of Mahtomedi’s Real Source Title in a transaction involving River City Mortgage & Financial, servicing company U.S. Bank and title underwriter Old Republic National Title on behalf of Millennium Title Group LLC of Maplewood. In spite of the fact that the couple is familiar with mortgage transactions – Julie Tarlizzo worked for 27 years at the Minnesota Housing Finance Agency and her husband works as housing director in the state’s Department of Employment and Economic Development. Even knowledgable peop;e can be duped. Read more at Pioneer Press.
Closers, Insurance and Financial Advisor reports that the House and Senate have passed a two-month extension to the FEMA federal flood program to run through Feb. 28, 2010. This is the third short-term extension of the program this year. The Property Casualty Insurers Association of America (PCI) spent this year urging Congress for a long-term extension of the program that protects against flooding for more than 5.5 million homeowners nationwide and of particular concern to Florida residents where many owners rely on the insurance.
Despite the housing-bust and declining home values, Minnesota homeowners see property taxes increase at an alarming rate in 2010. Local governments are turning to property taxes to help with fiscal deficits. Homeowners in several states are fighting for caps on property tax increases. Florida has capped increases on assessed market value at the lower of either: 3% over the preceding year on homestead property or the percentage change in the Consumer Price Index under a “Save our Home” Law. Minnesota should consider something similar. Somewhere along the line, increases have gone crazy. In the author’s case, her taxes increased over 30 percent this year with a markedly increased taxable value, in spite of the fact the property would clearly sell for less. Horrific. Unwarranted. Unrealistic. Unconscionable. There ought to be a law… or all in Minnesota will lose our homes.
Countrywide Home Loans Inc and BAC Home Loans Servicing filed suit on December 17 alleging that MGIC denied and continues to deny mortgage insurance claims submitted by them and that shares of the Wisconsin-based company fell nearly 10 percent.
Bank of America says MGIC denied claims based on “unreasonable interpretations” of its policies. Bank of America’s lawsuit notes that MGIC reaped “hundreds of millions of dollars” from the mortgage market during better economic times. MGIC’s “unreasonable interpretations” of its policies to deny claims comes as it faces steep losses in the downturn, the complaint notes, as reported by Associated Press on the Google site.
Residential mortgage numbers in default are higher than they have been since the Great Depression. Realty Trac, publisher of the country’s largest database of foreclosure activity, estimates that the numbers will continue to increase through the third quarter of 2010 due to high unemployment rates and the reset of interest rates on large groups of ARM loans in the 2nd and 3rd quarters of 2010. The foreclosure mess has prompted unprecedented legislative activity in 2009 in the individual states, specifically Minnesota and Florida, and at the federal level which is targeting both the default servicing companies and foreclosure industries. And of course the new RESPA TIL and and HUD-1 forms are an effort to make transactions more apparent to homeowners. More at NATIONAL MORTGAGE NEWS
US News & World Report has an excellent article on the outlook for Real Estate in 2010. Read it here. In the author’s opinion, interest rates along coupled with lower housing prices should be key to an economic return in 2010 for real estate. Particularly coupled with federal money for first time homebuyers. After all, a decent house price is great, but one pays much more for their mortgage than they do for the home, so the combination is becoming a great time to buy. As the foreclosures go back on the market, we may feel some relief for the mortgage companies, title companies, and all those who provide materials, labor, household goods, etc.
I read in William Pattison’s Blog the following:
“…old-school professional researchers, or “searchers” as they are commonly called, were not needed by title companies because of two factors: (1) the decision to skip-chain searches on property and (2) temp companies who can send inexperienced secretaries at minimum wage to type numbers into a keypad.
The skip chain research meant that the title company would no longer search the entire history of a property backwards in time to the original subdivison in order to properly ensure that no matters would adversely affect title. Instead, they would review the history back to when any title company (theirs or another) last insured a transaction and call the thing even at that point. In the case of a claim, instead of having conducted a diligent, comprehensive search to protect their corporate interests against a claim, they would simply pay out the insurance claim. This becomes a cost-of-doing-business expense, and hence a write-off for the corporation at the expense of the tax payer. The client is not protected up front, but rather protected in the back side by a willingness to simply have the title insurance pay out like any casualty insurance; a flood hits and the flood insurance pays off, a car hits yours and auto insurance pays claims, and someone makes a claim against title so the title company pays out.
The second item above, temp workers, means that professionals are no longer employed at high wages with full benefits when untrained, minimum wage workers can punch numbers into a machine that spits out results that are taken as gospel. No more consideration of the data is required. No more analysis of the information needs to occur. No follow-up or review of the results is necessary. Int the modern era, the information is passed automatically to a computer-generated report, which, if wrong, will be a potential claim that will simply be paid out in the future.” (End Quote)
What are your thoughts? Has title insurance become a casualty product where no one is looking at the title? It is not uncommon for me to see title commitments that simply say “Subject to easements of record or in use” rather than bother to find them, locate them, check that location against improvements, etc. The same is true with Restrictions. Who cares? A homeowner has to be sued to cease and desist when they don’t follow the rules. Unlikely to happen, so why bother to look for them or tell anyone there are restrictions.
I for one, am sad to see the quality of our product so deteriorated. But then, it seems to go with the territory of all the foreclosures and REO farms that are dealing with horrendous title problems as best they can to get the real estate market back on its feet. It feels like we are cheating the public.
Another family who refinanced their home, found out their initial mortgage was never paid at closing. Worse yet, the title company that did the refinance closing had gone under. Maple Leaf Title Co. had been in business since March 1999, but shut its doors August 2009 because it could not legally operate due to an expired license, according to state records. WBALChannelreport Read More
In a recent flury of title company problems, a Monmouth County NJ grand jury returned a seven-count indictment against two title company owners. The two sisters are accused of stealing approximately $780,000, to pay for personal expenses, including high-end vehicles such as Ferraris, lavish homes and travel.
The indictment charged the two sisters with second-degree conspiracy, second-degree misapplication of entrusted property, second-degree theft by failure to make required disposition of property received and second-degree misconduct by a corporate official.
The indictment also charged one count each of third- and fourth-degree bad checks, and one count of third-degree theft by deception. Following the return of the indictment, the sisters were arrested by from Monmouth County detectives. See full article at National Mortgage News
In its annual report on title insurance, Colorado’s Commissioner of Insurance revealed that the state is currently conducting an investigation into payment of referral fees and inducements for referrals in the title insurance industry, and anticipates that the investigation will yield “significant enforcement actions” in 2010.
The title industry in Colorado, like in many other states, has seen big changes in recent years. Colorado has seen the number of title agency licenses drop by half since 2004, from 715 to 356. Title insurance premiums in the state have suffered an even sharper decline, plummeting from $334 million a year in 2005 to a $141 million a year annual rate in 2009. In 2008, Mercury Companies Inc., a significant operator of title insurance companies in Colorado, filed for bankruptcy and sold its Colorado title operations to Fidelity Courtesy of Source of Title.
Colorado’s Department of Insurance has been active in past years regarding enforcement of state prohibitions of kickback payments for referral of title insurance business. In 2005, the state shut down took enforcement action to shut down 11 title agencies for paying for referrals, and promised to shut down an additional 180 sham title businesses. The state took seven formal enforcement actions in 2009.
Colorado’s annual report on title insurance can be viewed here.
WBAL TV ran this segment on the Maple Leaf Title Co alleged defalcation. More bad news for an industry already in sad shape. See video here.
Title Insurers and Closers, beware. CNBC has picked up yet another RESPA violation. It would seem that some second mortgage lenders are asking for “payments on the side – i.e. off the closing statement,” (clearly illigal under RESPA) in order to release liability under the second mortgage. Their leverage is, if you don’t pay, we won’t release, and you will have to go into foreclosure- wreck your credit – Your choice. Pay us, or we blow your short sale. Read the full CNBC Article here.
A great article from Preservation Monthly. The FHA is opening a one year program to help stabilize neighborhoods struck with foreclosure. The program, available February 1st, 2010 will allow access to FHA insurance much faster.
In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.
Similar to County Assessors using a pre-foreclosure sale price for assessed value, Jurisdictions in Maryland are struggling with the issue of how to calculate transfer taxes on short sales, stating that transfer taxes on short sales are not to be calculated on the sales price, but rather on the sales price PLUS the amount of forgiven debt. While Montgomery County has delayed implementation and is reviewing the issue, Anne Arundel County has indicated that it is now calculating its county transfer tax on the sales price PLUS the amount of the seller’s forgiven debt.
I am wondering if any other states or localities are doing this and, if so, what have people done in response? It makes no sense to ask the purchaser of a short sale to pay taxes on an amount over and above the sales price, the seller rarely has money to pay additional amounts and it is difficult enough to get lenders to approve short sales as it is without decreasing the money that is available to satisfy the debt Any thoughts?
It would be nice to hear some good news about a title company these days. The industry is certainly being clobbered on a regular basis. When is the last time we tooted our horn about paying a legitimate claim? We DO pay legitimate claims – do we not? All we seem to hear about are the things we do wrong. I guess that’s what “news” is all about – the items that get people’s attention. In that vein, National Mortgage News is reporting that an Alaska Title Company has paid a $50,000. RESPA fine forpaying a referral fee to a company that offered no services.
Read National Mortgage News Article here.
Another example of poor title work in the foreclosure process. A Massachusetts Land Court Judge invalidated a foreclosure that took place in Springfield. In his decision, he reasoned that since an assignment to the foreclosing lender was recorded after the foreclosing documentation, the foreclosure was invalid.
So, if a foreclosure is invalid, can the prior owner (borrower) claim against the title after a new buyer has purchased a house in foreclosure?? What if proper notices were not given to the mortgagee?? What if a lender improperly rejected a government mandated modification?? Could case law resulting from mortgage broker fraud invalidate a mortgage?? If anyone thinks thatTitle Companies are out of the woods with title claims – think again. With the phenomenal number of foreclosures and poor quality of title work, we are in for a tough time for the industry.
See more on Massachusetts invalid Foreclosure
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An excellent article at LoanWorkout.org shows a Judges anger, resulting in complete cancelation of both the Mortgage and Note debt, when the lender refused to negotiate in good faith to modify a sub-prime loan.
“This Court is of the opinion that cancellation of the indebtedness and discharge of the mortgage, when taken together, constitute the appropriate equitable disposition under the unique facts and circumstances presented herein.”
I’ve been in the data privacy and information security business for more than 20 years and there sure have been a lot of changes. I have really seen this industry grow up, particularly in the last nine years since I founded Privacy Solutions. Now privacy has its own official day- today. January 28th is International Data Privacy Day.To commemorate the day in true Privacy Guru® style, here are
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