08.25.08
Posted in Education at 2:13 pm by Jeanne
The Chicago Tribune has a MUST-READ Article for all title people. A bizarre case where the title underwriter, Ticor, sub-contracted out a title search for a $360,000. Mortgage transaction. Title work came back clear, the deal closed, docucments were recorded, and a title policy issued.
The entire transaction was fake and no payments were ever made. It was later determined that a backdated deed that might have been caught on the title search, transferred title from a deceased woman, one Amelia Johnson. The deed ran to Rhonda Evans, sister to the loan officer who placed the mortgage with Countryside. Reportedly, the fake deed should not have been all that hard to spot because the deceased’s name was spelled two ways and the alleged warranty deed, dated 1996, was recorded much later. The deed was also notarized by Mae Evans, who is the mother of Rhonda Evans.
It all came into public view when the deceased’s son’s body was found dead in the house and reports hit the new media.
In any case, Ticor is refusing to honor the policy, based on the idea that the loan never should have made it out of underwriting at the lender. A defense that is foreign to the title industry, and certainly does not fit with the traditional thought that title companies insure against fraudulent documents.
It will be a case the industry will follow with great interest. Stay Tuned…
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Posted in Education at 1:02 pm by Jeanne
by Robert Franco | 2008/08/12 |
Reprinted with permission from www.sourceoftitle.com
Carmel Valley, California, is a beautiful place. I was fortunate enough to spend a year in nearby Monterey in the early 1990’s. Sadly, last year it made headlines for a tragic double homicide that could probably have been prevented with a simple title search. A neighborly property dispute escalated to gun fire when a boulder was placed at the end of driveway blocking a carport. The alleged murderer is now on trial and the prosecution is attempting to admit a tardily performed title search into evidence.
In January 2007 John Kenney, the shooter, attempted to end a long standing property line dispute with his neighbors, Elizabeth and Mel Grimes, by placing a large boulder on a 10-by 4-foot of dirt partially blocking the VW bus of the Grimes’. Kenney claimed that he set the boulder there, at his attorney’s advice, to protect his property rights. Expecting trouble, he called the Sheriff’s office on the day it was delivered. The Sheriff’s deputies arrived as the delivery truck was leaving and when it appeared that the delivery was made without incident, they left the scene.
The defense has claimed that Kenney may have been acting in self-defense. Elizabeth Grimes told a police dispatcher that her husband was trying to break the boulder with a sledge hammer. If Mel Grimes was wielding a sledge hammer during a heated argument, Kenney may have felt threatened.
In a separate civil suit, which was later dismissed, Kenney sued the estate of the late Grimes for allegedly vandalizing his property and attacking him while he took pictures of them trespassing. Elizabeth was said to have grabbed a camera that was hanging around his neck. As further evidence that Kenney had a legitimate fear of the Grimes, the defense sought to introduce Elizabeth’s blood alcohol level of .06 at the time of the shooting. There was also evidence that a witness had heard Elizabeth yell at her husband to “leave him alone.”
The 911 tape paints a very different picture, however. Elizabeth could be heard clearly begging the operator to send help. Kenney is heard telling Grimes to “Get off my property,” to which she replied, “You shut up. Get out of our lives.” The prosecution also claimed that Kenney could be heard saying “Welcome, Elizabeth. Welcome to hell.”
Then, there was a rustling noise followed by two gun shots and someone moaning. Elizabeth was screaming, then two more shots. The 911 call ended with the couple exchanging their final “I love you” to each other, then a fifth shot. Clearly a tragedy.
The murder case against Kenney has been plagued by delays. With all of the media attention, the defense had been seeking a change of venue. Because Mel Grimes was a prominent local attorney the defense has tried to have the judges and prosecutor recused because they knew the victim well. Finding impartial jurors has also been quite challenging. The last delay came when the prosecutor was removed for health reasons and the charges were dismissed and refiled with a new prosecutor.
The most recent news came when a title search, complete just a couple weeks ago, revealed that the Grimes had an easement across the disputed land, about the size of surfboard. According to an article in Monterey County’s The Herald, Grimes’ Access to Land Legal, the parties knew of the easement.
Prosecutor Berkley Brannon said a “simple title search” on Kenney’s property showed the Grimeses had a right to cross the rectangular piece of land to get to their carport, which they had done for years.
He said the search, completed two weeks ago, also showed Kenney’s real estate agent had inquired about the easement and that Kenney signed documents signaling his knowledge when he closed escrow on the Hitchcock Canyon Road property in 1999.
…
Brannon said he’d not yet received the results of a title search on the Grimeses’ neighboring property, but believed they would have known about it as well. Mel Grimes brought the property in 1995.
If true, he said, it could explain why they ignored repeated demands by Kenney and his attorney at the Fenton & Keller law firm to stay off the property.
What is not clear, and what he’s not been able to ask because of attorney-client privilege, Brannon said, is why that attorney did not order his own $500 title search before concluding that the disputed land belonged to Kenney and recommending he place a barrier on it.
Another attorney who represented Kenney, Nick Cvietkovich, told The Herald that a lawyer at Fenton & Keller instructed Kenney that if he did not erect a barrier, the Grimeses could claim a “prescriptive easement” to the land at the top of their shared driveway.
A spokesperson for Fenton & Keller said that he could not comment because of the ongoing attorney-client privilege. Of course, the defense is attempting to have the title search excluded from evidence as irrelevant.
“None of this has anything to do with my client’s property,” he said. “It has to do with him being attacked.”
The judge has not yet ruled on the admissibility of the title search.
I have agree with the prosecutor. Why would Kenney’s lawyers have advised him to place the boulder on the disputed land without first doing a title search to make sure that he was within his rights to do so? Had they conducted a title search, and advised Kenney that the Grimeses were within their rights to use that land, Kenney may not have been happy about it, but the situation might not have escalated into such a deadly feud.
Furthermore, Grimes was an attorney and, even if he was unaware of the easement, he most certainly knew how to go about finding out whether his use of the property was legal. Why didn’t he respond to Fenton & Keller with a letter explaining that he had an easement? That also could have de-escalated the situation.
It would seem that the first step in any boundary dispute between neighbors would be to obtain a proper title search to determine the parties legal rights. In this case, it came way too late and may have needlessly contributed to two deaths.
About the Author
Robert A. Franco has been in the title industry for nearly 20 years in the state of Ohio. The owner of VersaTitle, a full service abstracting and title company, and the founder and president of Source of Title, Franco has dedicated much of his professional career to the land records industry.
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08.20.08
Posted in Education at 1:04 pm by Jeanne
As an educator, I often teach about the proverbial Government Rights, and the right of taxation. We all know that real estate taxes are a “first lien” on real estate. That foreclosure of real estate taxes will wiipe out even a first mortgage. Well, I believe its time for the Counties to exercise that right against neglectful lenders. In tens of thousands of cases, Lenders loaned more money than properties are worth, and then taken them back in foreclosure. Once the lenders foreclosed, it became their responsiblity for upkeep and maintenance on the home; including mowing the grass, keeping the property safe, and paying property taxes. When REO lenders fail to maintain properties and pay taxes, local communities suffer, surrounding property values are reduced, neighborhoods decline, and the county not only loses tax base, but ends up having to deal with the problems.
I recently saw a news report where a neighbor called the local tv station complaining about an unattended swimming pool at a foreclosed home. Its fence had fallen down, water had turned green with mold and slime, and stank due to lack of care. The neighbor had bothered to located the lender-now-owner that had foreclosed, explaining the problem, but to no avail. The tv station picked up the story as a human interest story, talking about the dangers to children and pets in the neighborhood, and pointing out that this was not an uncommon problem. After the tv anchor put the story out, the lender finally complied in fixing the problem. But this is just one case. In neighborhoods all over, foreclosed houses are a huge problem.
Using delinquent tax sales to sell properties to someone who will take care of them and start paying taxes makes sense. Filling the County coffers with money owed, makes sense. Counties should use tax sales and may even have a responsibility to do so, when foreclosing lenders are negligent in taking card of property. Counties please - take the properties tax forfeit so the public will not have the expense. Take the properties before the buildings deteriorate beyond repair so no one wants to buy them. It is your right. It is your duty.
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08.10.08
Posted in Education at 2:22 pm by Jeanne
Minnesota has reached a first-of-its-kind agreement to co-promote new and existing types of FHA mortgages with Federal Agencies. The Minnesota Housing Finance Agency (MHFA), a state agency committed to affordable housing opportunities for low and moderate income Minnesotans and HUD have announced a partnership to promote loans for the target market. The MHFA and FHA recognize that as the housing market has changed and credit has become more difficult, consumers need access to new programs, and they want to make sure the public is aware of these programs.
The goal of the partnership is to improve education for Minnesota real estate professionals so that they are aware of stable and secure FHA-insured mortgage programs that Minnesotans can access. Accordingly, the agencies have agreed to schedule statewide training and information sessions for Lenders, Real Estate Agents and Housing Counselors using both FHA and Minnesota Housing officials. The sessions will increase familiarity and explain availability of both new and existing FHA-insured loans. A major shift in FHA premium charges is now occurring, where borrowers are charged MIP based on their credit risk, rather than the former one-rate flat fee where “one-size-fits-all.” That change will make an FHA loan more affordable for many with lower income, but good credit scores. Another new program, the FHASecure Refinance product, will be available to homeowners with adjustable rate subprime mortgages that are now past due on their mortgages, helping them stay in their homes. The educational programs will also highlight ways the MHFA-HUD partnership can provide FHA’s affordable products to first-time homebuyers and low and moderate income families who wish to purchase homes.
In the past, the Federal and State agencies have operated independently, but this innovative “Memorandum of Understanding” forges a new working relationship and commitment by the combined forces of state and federal governments to local communities.
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08.01.08
Posted in Mortgage and title Fraud at 2:20 pm by Jeanne
Good news for Minnesota - or at least a bit better than last year… Minnesota moved DOWN on the list of the WORST states for Mortgage Fraud. The Mortgage Asset Research Institute issued information on the Top 10 states for mortgage fraud that was reported on single-family home loans in 2007 versus their rank in 2006. The latest results are as follows:
State 2007 rank/ 2006 rank
Florida 1/1
Nevada 2/6
Michigan 3/3
California 4/ 2
Utah 5/11
Georgia 6/4
Virginia 7/14
Illinois 8/8
New York 9/9
Minnesota 10/5
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Posted in Education at 2:16 pm by Jeanne
Fitch Ratings completed a study on the U.S. title insurance industry’s risk-adjusted capital position at year-end 2007. The study showed a significant decrease in the risk-adjusted capital (RAC) for the title insurer world. The title industry’s risk-adjusted capital ratio is the lowest since Fitch began calculating the RAC Model in 1997.
For a copy of the report ‘Title Insurers’ Risk-Adjusted Capital Adequacy at Year-End 2007′, dated July 7, 2008, interested parties should visit the Fitch Ratings Website and click on the “Financial Institutions” tab, then the “insurance” tab and lastly, the “Special Reports” tab.
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