Title Work sent to India
As many of us know, Land Records in the US are now routinely sent to India and the Philippines to be input into our computerized public land records.This is a video of some vintage (14 months old) showing the progress of one India firm with over 600 employees doing over 100 processes in all 50 states it says. An interesting overview for all in the title industry, showing the growth in outsourcing the title industry overseas and the many companies involved. See video at UTube here.
Closing and Equitable Title
Another good Equitable Title Post for mortgage and title closers. Shows what can happen when intentions to maintain an interest are not turned into reality because the language was not clearly spelled out when creating the deed. Creating legal documents is much more than filling in the blanks. A portion of the lawsuit reads:
The first lender intended to retain a security interest on the second parcel for the two remaining loans. As we explain below, that is not what happened, and we must address the issue of whether the title and sub-escrow company is liable to the first lender.
Read more from Leagle.com here
Stewart Title Clamps Down on Foreclosures
In an internal memo obtained by The Associated Press, Houston-based Stewart is issuing guidelines to its agents that make it difficult to write policies on property foreclosed upon by four banks whose processes are in question. Those banks are JP Morgan Chase, Bank of America, OneWest Bank or Ally Financial’s GMAC Mortgage unit. See AP article here.
New York Times Article on Foreclosures and Title Insurance
The New York Times has an excellent article on foreclosure issues and the predicament that both the Public and title insurers find themselves in. They clearly understand the problems and clearly state some of the “What if’s” This is a must read article for all dealing with foreclosures. See NY Times article.
Bank of America and Others Halt Foreclosures
“If it turns out these are mistakes in who owns (the mortgage), the claims against the title insurance industry could be overwhelming,” said Kathleen Day, a spokeswoman for the Center for Responsible Lending, which has joined a suit against GMAC and has called for a nationwide moratorium on foreclosures. See full article at MSNBC.com
New Systems have Short-Circuited Foreclosures
“The problem with foreclosures is that we have short-circuited all of the legal processes and safeguards that our courts are supposed to provide,” said Matthew Weidner, a real estate lawyer in St. Petersburg. Fla.
It will be interesting to see how each state deals with the foreclosure mill issues where law and order has given way to fast and dirty processing. Clearly it is often unclear as to who “owns” the mortgage, who is foreclosing on behalf of whom, or even has the mortgage been sold more than once to different parties. It is certainly a debacle.
Read more at ABC News
Ally Financial, fka GMAC Halts Foreclosure Evictions
Washington Post Staff Writer
Monday, September 20, 2010; 9:20 PM
Ally Financial, formerly GMAC, the troubled lender that received a massive federal bailout, has temporarily halted evictions on foreclosed homes in 23 states, a company spokesman said Monday. The moratorium was due to “an important but technical defect” in the company’s court filings for individual foreclosures. Ally spokesman said that in a number of cases the legal documents in support of the foreclosure proceedings “may have been executed without direct personal knowledge stated in the affidavit” and were not signed in the presence of a notary public.
But attorneys said the suspension of evictions came after lawsuits filed against Ally Financial suggested that tens of thousands of foreclosures across the country were signed without reviewing the documents.
In a deposition, an employee stated that when he put his signature on case files, he did not know what information the file contained other than the borrower’s name, that he did not inspect the exhibits he was supposed to, and that the notary who supposedly witnessed his signings was not in the room.
Thomas Cox, a lawyer in Portland, Maine, who took the deposition while representing homeowners, said in a phone interview that it’s clear that this employee “doesn’t know what he’s talking about.”
“We’ve established that in these foreclosures GMAC hasn’t proven its case,” Cox said.
Cox said the Maine attorney general’s office is investigating the matter. The GMAC employee’s name also came up in several mortgage foreclosure cases in Florida that are being disputed. The attorney general there is investigating at least four law firms that process foreclosures there, saying that they may be fabricating information or presenting misleading documents in cases.
Ally declined to respond to specific questions on the pending litigation, but emphasized that the “sum and substance” of the company’s foreclosure filings were correct. And an internal review has found that there were no “factual misstatements or inaccuracies” about the mortgage holders or the delinquency of their loans, he said. The vast majority of cases will be resolved in the next few weeks. Some, however, will require “court intervention.”
The suspensions will give the company time to review files across the 23 states, which span the country from New York to Florida and Hawaii. These states follow a judicial procedure that requires a court order to approve a foreclosure. A bank representative must sign off on the validity of a foreclosure filing after checking that the correct mortgage holder is named and that he or she is truly in default, among other things.
In an internal memo dated Sept. 17 and marked “urgent,” brokers and agents of the company’s GMAC mortgage unit were ordered to immediately halt evictions. Ally, the nation’s fourth-largest home loan originator, may “need to take corrective action in connection with some foreclosures” in the affected states, the memo said. More at the Washington Post
Title Examination Seminar September 13-14
Jeanne Johnson & Associates present:
“Title Examination for Title Insurers”
September 13-14, 2010
St. Paul, Minnesota $495.
Exam Title from A-Z For More information click here: Title Exam Class
Who Should Attend?
The class is best suited for people with several years experience in the Real Estate or Title Industries who
• Want to build confidence in full and complete title examinations (Patent to present)
• Want to expand their current skills in Abstracting, Searching or Closing with a full understanding of both the Title Examination process, the resulting Title Commitment and Problem solving
• Wish to expand skills into a Title Examiner position
This hands-on course runs through the core elements of real estate law and how to examine title searches. It covers ALL types of liens – how they attach and how they can be removed. It discusses coverage under the 2006 ALTA Policy and use of the Title Standards.® We use practical hands-on examples, examine real world title problems and end by a doing a complex title exam.
As a result of this seminar, participants will be able to:
• Define, explain and apply the “thirty and forty-year laws” to a full title exam
• Anticipate necessary exceptions to title based on the legal description
• Recognize problems encountered within a chain of title
• Recognize what title issues are acceptable using Terms of the Policy and Title Standards®
• Write concise instructions as to how to clear title
• Identify Title Problems – from everyday matters to complex issues
• Identify 50 ways to clear title problems and select the best solutions for problems
• Describe and give examples of appropriate “special guarantees”
• Recognize and give examples of inappropriate “special guarantees”
• Examine title to a reasonably complex Abstract of Title from Patent
• Explain due diligence in examining title for the Underwriter
• Recognize Red Flag areas that require special review by experts
Abstractor Sued Over Email Message
A Client sues an abstractor after receiving an apparently erroneous Email over a question of priority as to a particular mortgage lien. Client alleges that, in reliance of abstractor’s one-word “yes” e-mail response to his inquiry about the loan, he submitted a bid at the foreclosure sale on March 11, 2008 in the sum of $1,000,000.01. He further alleges that he was only able to sell the property for $1,200,000 and, after negotiating a reduction in and then paying the balance remaining on the senior Citimortgage lien, he sustained a loss in the sum of $1,000,000. So he sues the abstractor.
No title insurance policy was ordered, no abstract of title was ordered, nor was there any money that changed hands. Good case of Caveat Emptor. It would seem that the public thinks they can sue for anything, without taking any responsibility for their actions. Client did not take the time and effort required to guarantee good information.
A good case out of California, where the court once again got it right, in the opinion of this author. After all, shouldn’t one spending over a million dollars have some sense of business acumen and basic knowledge when it comes to dealing with real estate? Read the Soifer v. Chicago Title case here.
Will Letters of Indemnity be Our Train Wreck?
Many title insurance companies are working from existing files these days, or just go back a deed or two. The underwriters seem to be good with this. In other cases, title proteges swap use of files between a number of companies.
But the quality of the searches and the agents doing those examinations varies significantly. Often too, we have relied on letters of indemnity to overlook title problems in those swapped files. Those letters of indemnity mean that someone along the line has not taken care of a title problem. The problem may go back two -three sales or more, and with the short cuts taken these days in title examining, there are as many bad titles out there as good I would estimate.
At some point this casual attitude about not clearing title problems is likely to wake up the title industry to a serious problem, one that is getting worse every day. What if that title agent steals funds from multiple closings and covers it up with LOI”s? Are we creating opportunities and an attractive nuisance? How many of your closings have a LOI?
In the author’s opinion, we should take a second look at what we are doing. Title defalcations, fraud and theft are serious problems we see every week in the title and closing industries. Somewhat like the mortgage debacle, where we saw the train coming and did not move, are we building a title debacle with our eyes now in the headlight of the train?
Home Closing 101: An Educational Initiative of the American Land Title Association
