03.20.08
Posted in Education, Industry News, Licensing, Money and Finance at 2:23 pm by Jeanne
Yesterday, My Fox News in Minnesota, reported a MN Commerce Department raid, where officials found thousands of mortgage closings that were never completed at two additional title companies - Title Source Mortgage Company and Home Sweet Home Equity. The raid showed that “more than 3,000 homes nationwide” were affected. The Commerce Department revoked the license of the companies, whose owners allegedly spent some of the money for a suite at the Minnesota Vikings games, and $20,000 in political contributions.
I am not sure what all that means, but I would estimate that once again, the title insurance underwriter(s) will be up to their proverbial necks with trouble from owners, lenders and the secondary market, because:
• Thousands of homeowners have unfiled deeds. Of record, they have no title to their houses. They will be hard pressed to sell their homes, refinance, etc.
• Unwarranted Foreclosures will be forced. Money collected to pay off mortgages was likely not sent to the appropriate lender, causing these houses to be forced into foreclosure, through no fault of the owners.
• Unpaid monetary items on each closing will be a huge problem. Taxes, assessments, homeowner association dues, child support liens, mechanic’s liens, and other title issues, while collected at these closings, will remain unpaid on these homes until the title mess is cleaned up on each home. Penalties and interest accrue on many of these daily.
• Likely hundreds of lenders have unsecured mortgage loans on these 3,000 properties, because the mortgages have not been recorded at the respective county. These lenders will have loans unsalable on the secondary market, because no mortgage notes and collateral packages have been provided to the end lender. And, at a mere $260,000 per transaction, that would be about $780,000,000. worth of headaches on this one title agent.
I have long been outspoken in my concerns about the quality of title work, and signing of inept and unethical title agents, but hand in hand goes the similar responsibility about the quality and integrity of closing the transaction. Title Agents need to be both knowledgeable and ethical. Title agents handle Billions of dollars each year of the public’s money. The licensing and oversight of Title Agents is obviously not being appropriately handled by the five national title underwriters.
It seems to be time for state legislatures to step in. Why not fund State oversight of title companies by assessing significant enough penalties to really make them do the right thing. Title companies need oversight of funds, regular education and continuing education in laws and ethics, and they need a big stick to make it happen.
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Posted in Education, Industry News, Licensing, Money and Finance, Mortgage and title Fraud at 2:11 pm by Jeanne
Last month the Minnesota Department of Commerce announced it had taken action against another kickback scheme in which a title insurance agent set up sham affiliated businesses with real estate agents, mortgage originators and developers in order to get around state and federal laws prohibiting direct payments for referrals. The Department shut down six more sham affiliated business by revoking their title insurance licenses. Licenses revoked included: 1st Title, St Louis Park, MN; Timberland Title, Arden Hills, MN; Royal Title, Minneapolis, MN; St. Cloud Title & Abstract, St Cloud, MN and Foundation Title, Brooklyn Center, MN. The final company, Desert Sun Title, did not even have an address or any referral partners. It also fined Premier Title Insurance Agency $175,000 for the kickback scheme.
According to the MN Dept of Commerce enforcement web site, Premier Title Insurance “created and controlled sham Affiliated Business Arrangements (ABAs), employed or contracted with parties not licensed to sell insurance, ABAs sold Fidelity National Title’s policies, unlicensed people were paid commissions, and failed as a supervising agent to ensure that ABA relationships were disclosed..” They also “paid kickbacks or other things of value to its referral partners for the referral of title insurance business and real estate closings.”
Last year, the MN Department of Commerce fined First American Title Insurance Company of Santa Ana, California, $500,000 and shut down 35 of their sham affiliated businesses.
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01.09.08
Posted in Education, Industry News, Licensing at 11:52 am by Jeanne
The National Association of Land Title Examiners and Abstractors (NALTEA) has extablished a Certified Abstractor (NCA) designation. This is the first national industry recognition to distinguish excellence in Land Title Abstracting. The designation illustrates superior national skill levels and proficiency in the trade and demonstrate superior value in the quality of products delivered. The designation is obtained both through comprehensive study and testing of industry knowledge. The national exam will be given at the Naltea conference in New Orleans on January 20th.
In preparation for the exam, the NALTEA education committee has put together an important manual that can be used as a resource for the NCA examination. Persons who have signed up for the exam will be supplied with the study guide, along a two hour exam-prep session lead by long-time abstractor-teacher Jeanne Johnson, at the conference. The manual is also available online at this site.
NALTEA consists of smaller committed independent professionals who service the land title industry, care about quality, are concerned with industry standards; and are dedicated to competence.
Objectives of NALTEA associated with the NCA designation are:
• To establish and maintain uniform standards and practices for the profession of land records abstracting by setting forth guidelines for training, experience and ethical conduct.
• To foster better relationships among title examiners/abstractors and those whom they serve, i.e., title insurers, lending institutions, attorneys and other land title professionals.
• To provide information and education to the membership of the Association; to members of local, state and federal legislatures having jurisdiction over the land title industry; to consumers; and to businesses engaging in the transfer of ownership interests in real estate.
• To promote understanding and awareness of the importance of the proper examination, abstracting and reporting of land title records.
Those members who receive the Naltea Certified Abstractor designation demonstrate both a commitment to the industry and a solid working knowledge of national abstracting and searching knowledge. It is a designation to be revered and cherished by our industry.
I encourage you to consider working toward your NCA designation, it is a worthwhile badge both for you and our industry. For more information contact NALTEA
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12.11.07
Posted in Industry News, Licensing at 4:23 pm by Jeanne
It’s hard to believe an esoteric industry like ours can be so maligned. Are there really that many BAD title agents? Are the Title Underwriters so GREEDY they are willing to sign anyone who can bring in a title policy? Will it take NATIONAL legislation for the industry to become moral? Just today, in Boston, Kansas City, Hartford, San Diego, Bismark, Denver… and elsewhere, here is just a sampling of what the media says about title insurance:
Title insurance and me
Boston Globe - United States
They’re mad because I didn’t buy homeowner’s title insurance and, they say, because other people may not buy a policy as a result. …
State goes after licenses of Guaranty Title managers
Springfield,MO,USA
Matt Blunt signed extensive title insurance reform legislation. Senate Bill 66 clarifies a duty to fully disclose to consumers separate price information …
AG, DCP, Insurance Dept. announce $700000 settlement in kickback …
Hartford Business - USA
In an October lawsuit filed on behalf of DCP and the Insurance Department, Blumenthal alleged that Reiner, which also sells title insurance, used sham …
Lawsuit against title company won’t be a class action
Kansas City Star - MO,USA
In fact, May and his law firm have already filed similar suits against title insurance companies in other jurisdictions. Pending in Jackson County Circuit …
Legal tangles surround hidden cemetery
Kansas City Star - MO,USA
Stewart Title Guaranty Co., his title insurance company, said the mistake did not hurt the land’s value at all. They offered him $10000 in damages. …
The art of the double deal
Denver Post - Denver,CO,USA
In a double closing, buy-sell transactions are staged in succession, often in separate rooms of the same title insurance company. …
YOUR PLACE TO CALL HOME: Realtors can help you find answers
Suburban Journals - Town and Country,MO,USA
What will be the total cost of the title insurance or loan you are securing for your new house? Can the company you hire meet the deadlines that you have in …
Watch who leads through crisis
TheReporter.com - Vacaville,CA,USA
Real estate brokers, mortgage brokers, mortgage lenders, title insurance companies, fire insurance companies, real estate appraisers, and attorneys - are …
Want to Find Treasure in the Sierra Madres?OpEdNews - Newtown,PA,USA
They include financing, title insurance, bank trust regulations, and other tools to provide security to the foreign investor. All Mexican land within 100 km …
Official wants to keep program but halt abusesRocky Mountain News - Denver,CO,USA
Earlier, as the state’s deputy insurance commissioner, she cleaned up a national mess involving kickbacks in the title insurance agency, which included her …
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This once a day alert just gives a sampling…
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07.06.07
Posted in Education, Licensing at 9:34 am by Jeanne
This web log article was approved for publishing by James Pearson, Director of Licensing, MN Department of Commerce.
In order to understand the closer licensing requirements, I have had several excellent conversations with the Department of Commerce.
To quote Mr. Pearson, the Director of Licensing for MN Dept. of Commerce:
“In my view, the licensing requirement is clear, but the confusion begins in reviewing the exception language. Minn. Stat. 82.34, subd. 16 provides for an exception from the licensing requirements (among other things) based on a contractual agency relationship with a title insurance company. In such cases, no closing agent license is necessary, but if a closing agent is involved in a transaction outside of that contractual relationship, a license is required. It my understanding that this is where the confusion stems from.”
Mr. Pearson also stated, “The discussions that I have had with Dave [Welshons, President of the MN Land Title Assoc.] and others was on this point. In my view, it is up to the industry to determine if they (as an industry) want to do anything legislatively to clarify this situation. Currently the only guidance that the Department can provide is for them to consult their specific contractual agreements.”
Comment by Jeanne Johnson: I think Mr. Pearson clearly describes the essence of the licensing issue when he says, “if a closing agent is involved in a transaction outside of that contractual relationship, a license is required.” In other words, to resolve the issue, each title agency must review its contract as it pertains to specific closing liabilities. While Title Underwriters generally cover those closings done with both an Insured Closing Letter and corresponding Title Insurance Policy. in some instances, an Agency Contract may be expanded to cover a broader range of closings. However, closing liability is handled on a case-by-case basis between the Underwriter and Agent.
While typically, there are closings outside the agency contract that would require the license, such as cash closings, any owner’s policy (without an insured closing letter issued to the owner,) assumption closings, closings using an attorney’s opinion, Contract for Deed transactions, etc., that is not always the case. The bottom line appears to be Title Agents need to carefully review their contracts to see if the closings they handle fall outside those covered by their Agency contract.
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