05.02.08

Judge Fines Law Firms $150K for Listing Wrong Lender

Posted in Don't underestimate a title searcher! at 3:21 pm by Jeanne

A federal bankruptcy judge in Massachusetts sanctioned two law firms with $150,000 fine for incorrectly claiming that their client owned a mortgage that had been reassigned at least twice according to the ABA journal
The judge found that lawyers at both law firms, had continually represented that Ameriquest was the holder of a mortgage, when in fact it had been assigned to Norwest.

The judge held:
“At a time when mortgages and notes are bought and sold at a pace so swiftly that the assignor and assignee cannot keep up with the paperwork, had the attorneys at the firm checked the firm’s file, they would have seen that Norwest was perhaps the real party interest. . . . The firm cannot shield itself from institutional knowledge.”

I have to agree that it is pretty difficult to keep track of who’s on first right now. With all the foreclosures, assigning of mortgages, and documents under wrap inside of MERS, who knows who’s on first. And with the phenomenal volume of foreclosures these days, the attorneys, it seems, seem to be cranking them out like hotcakes. Foreclosures are NOT that simple, that they should be turned over to inexperienced staff. It makes it especially important, I think, for law firms to rely on abstractors and title companies to at least get the latest correct information as filed at the Courthouse.

In a related event, A Wall street journal blog, says a bankruptcy judge admonishes that Wells Fargo “turned all responsibilities over” to a mortgage servicer and was willing to “turn a blind eye” to the servicer’s mistakes. Had WFC” shown even a modicum of oversight or review” of the servicer’s behavior, “it should have been able to correct the misrepresentations” made to the court. He stated “This court will not allow Wells Fargo or any other [mortgage holder] to shirk responsibility by pointing fingers at their servicers.”

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04.21.08

Another Claim for an Accurate Five Minute Title Search

Posted in Don't underestimate a title searcher! at 9:53 am by Jeanne

I believe in automated title plants. They are a good thing. Not to have to drive to the Courthouse every day, not having to physically handle musty, dusty, not to mention heavy old books. Not having to pull microfilm, aperture cards, paper copies, all of which deteriorate as they are handled. Not to worry about natural disasters - like fires and floods that wipe out public records. These are all good things.

But I hold the line when a company, like TitleEDGE, advertises it can provide:

“complete automated searches and preliminary examinations via a variety of title and foreclosure products in an average of five minutes. These results include the chain of title, general or name index, taxes maps, and other items are then, according to the company, “reviewed by a qualified title professional and delivered to title company customers in as little as 15 minutes.” After a review by the title company, the completed title product can be delivered to their customers in as little as one hour.

Once again, it would appear that whomever is using this product is providing casualty insurance. Yes, you can tell me that a competent title search, one showing all easements, restrictions, judgments, special assessments and dozens of other potential hazards is available in 5 minutes, but I do not believe it. I know from experience, a good title commitment and policy require significantly more oversight than that. It makes me angry to suggest that a 5 minute title commitment is accurate and true. What is true, is that the resulting product is a weak, cheapened version of what was a formerly strong, healthy title insurance product.

Why not admit it, creators and users, that the goal of this product is to simply keep costs down, and give faster delivery time. Keeping costs down and fast delivery are good things! Things a computerized title plant can offer. However, the claim of “improved accuracy,” in a title commitment? Now that is a fallacy. A good title product requires spending time to LOOK at each of the actual documents. That is the POINT of the recording system, to put in writing the intentions of the buyers, sellers, lenders, easement holders, etc. etc. etc. If you do not take a GOOD look, and use your noodle to figure out what is missing or wrong in the picture when examining title, the work is worthless.

I applaud those title agents and underwriters who take time to thoroughly LOOK at the documents, the good old-fashioned way…those who use their knowledge and expertise to put out a worthy product. We know legal documents contain a wealth of important information for our clientss and we need to inform our customers of what those complex documents mean to them. But, those who endorse and use of Five Minute Title Searches - beware. You will suffer mightlily with higher claims and your customers will suffer too.

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02.29.08

Title Insurance Abstractors and Examiners - Who is in the Drivers seat?

Posted in Don't underestimate a title searcher! at 2:03 pm by Jeanne

I struggle, I believe the world is flat. With computerization, the world has become one. I know that we can and are significantly cutting the cost of posting title plants outside of the US. I know that with a solid education system for title plant personnel, outsourcing of title plants to other countries can produce an excellent product at an excellent value.

I also know that with 50 states, 3143 Counties, Parishes or Independent Cities and tens of thousands of taxing authorities in the USA, a “thorough” title search can only be compiled at the local level. There are just too many nuances. Did you know that a parking ticket is a lien on the land in some jurisdictions? Ever heard of an airport lien? How about sidewalk liens, ditch liens, impact fees? Every jurisdiction – federal, state, county, township, city, village jurisdiction has its own rules and regulations. Every jurisdiction – federal, state, county, township, city, village has its own politics that will not allow complete sharing of information. The shear quantity of information (at this point in time) together with local politics (possibly forever) does not allow the possibility of a complete, thorough and accurate title search without local intervention.

We still need a competent local title abstractor and a competent local title examiner to do the traditional solid title work that used to be the norm. The key here is used to be. What I think does not matter. Abstractors and title examiners are just passengers in the car. The title insurance underwriters are driving. We are just going along for the ride.

The title insurance underwriters decide HOW they want to insure real estate. The title insurance underwriters decide if they can best make a profit by becoming risk underwriters. The underwriters decide if outsourcing of title plants will occur because it is cheaper and their duty is ultimately to their shareholders. The underwriters decide if outsourcing of title examinations, commitments and title policies will occur because it is cheaper and their duty is ultimately to their shareholders.

A serious discussion needs to take place as to the future of the industry. But what about today? What do we do?

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07.24.07

The American Title Ins Industry: How a Cartel Fleeces the American Consumer

Posted in Don't underestimate a title searcher!, Education, Industry News at 5:53 pm by Jeanne

The American Title Insurance Industry: How a Cartel Fleeces the American Consumer is the newest book about the title industry, that will grace the shelves of local bookstores on August 1st.