Chicago Title

Title Agent Charged with Negligence and Compensatory Damages

A Connecticut title agent was held liable for $77,500 that was paid by a Title Underwriter to clear title to property it insured, as well as more than $20,000 in compensatory damages for fees and expenses incurred in negotiating the settlement. The case showcased liability by the agent for a negligent title search, and breach of duty to the underwriter.

Read the case here.

Jeanine W. (Jeanne) Johnson to Speak at ALTA Business Conference

Jeanine W.  Johnson will be a conference speaker at the ALTA Business Conference in Louisville, KY March 26th. A primary function of the American Land Title Association (ALTA) is to provide important educational programs.  A “Train the Title Trainer” session will explain adult learning styles and demonstrate how to teach important and complex title issues to staff. Ms Johnson is a professional speaker on title topics, and is often hired to speak at Land Title Association conferences.  She also owns an online school for Professionals in Land Title Training. Online Courses include Title Insurance, Closing, Abstracting, Title examination and National Concepts in Title.

WHY ATTEND THIS SEMINAR? WHY EDUCATE STAFF?

  • For a better understanding of customer needs
  • For Fewer Claims!
  • To grow staff, so they have opportunity for a better career path
  • So that you can retire someday and they can take over 🙂

COME HEAR MORE    Jeanne Johnson is a professional Land Title Association (LTA) public speaker and teacher. She has spoken at many Land Title Conferences. At the upcoming ALTA Business Strategies Conference,she will teach a workshop on how to explain complex title topics. While the workshop focuses on understanding adult learning and instructor delivery, she demonstrates tips for training title.  A blueprint handout will show specific skills for teaching abstractors, examiners and closers complex title issues.Jeanne will actively demonstrate ways to teach to all types of learners about “rights, title and interests” so staff can identify title issues as “okay” or “problems” needing to be resolved.

And, on top of all that,  you might just find a speaker for your next land title conference!

For more information on the conference, go to this ALTA Link

Owner of Troese Title Companies Sentenced to Prison in $2.838 Million Mortgage Fraud Scheme

Press Release

Targeted News Service

BALTIMORE,Feb. 7– The U.S. Attorney for the District of Maryland issued the following news release:

U.S. District JudgeWilliam M. NickersonsentencedStephen J. Troese, Sr., age 72, ofDavidsonville, Maryland, today to a year and a day in prison followed by three years of supervised release for wire fraud arising from a scheme to defraud lenders and a title insurance company of$2,838,231.

The sentence was announced byUnited StatesAttorney for the District of Maryland Rod J. Rosensteinand Special Agent in Charge Richard A. McFeely of theFederal Bureau of Investigation.

According to his plea, Troese practiced as a title attorney and was variously an owner, part owner, or the controlling figure of a number of title companies that did business in theBaltimore,AnnapolisandWashington, D.C.metropolitan areas, includingTroese Title Services, Inc.(Troese Title), located inCamp Springs, Maryland;Troese/Hughes Title Services, Inc.(Troese/Hughes), located inGreenbelt, Maryland; andTroese/Prestige Title Services, Inc.(Troese/Prestige), located inEllicott City, Maryland. These companies performed title searches, provided title insurance, and conducted settlements. Troese Title, Troese/Hughes and Troese/Prestige each had an agency agreement with Chicago Title enabling them to provide title insurance, which meant that Chicago Title was liable for title defects to homeowners and lenders.

Troese Title and Troese/Hughes, which Troese formed in 1994 with co-defendantJames Kevin Hughes, shared a joint escrow account for the receipt and disbursement of funds in connection with real estate closings carried out by both title companies. Co-defendantBrenda Lukenichwas the escrow accountant for the joint escrow account as well as for most of Troese’s other title companies.

By 2005, the joint escrow account had developed a shortfall of more than$2 million, partly as a result of several major employee errors and embezzlements. Sometime in 2006, the joint escrow account was split into two new accounts and the existing balance from the joint account was divided between the new Troese Title and Troese/Hughes accounts, effectively assigning a$1 millionescrow shortage to each company.

In approximately 2006, the real estate industry started to slow, resulting in a steep decline in business for Troese Title and Troese/Hughes, further aggravating the problem of the shortfall in the escrow accounts.

In 1994, Troese had refinanced his home, claiming that the$655,000loan would be used to pay off the previous first and second mortgages. In fact, the mortgages were not paid off. InFebruary 2006, Troese again refinanced his home, representing that the loan of$964,533.26, would be used to pay off the two existing mortgages. Again, the mortgages were not paid off, but instead the funds were used to help cover the existing shortfall in the Troese Title escrow account. Troese concealed the fact that the mortgages were not paid off by continuing to make the monthly mortgage payments on all three loans. The resulting loss to Chicago Title was$937,183.47, which it was required to pay to satisfy the two previous mortgages and pass clear title to the new lender.

InMay 2008, Chicago Title terminated its agency agreements with Troese Title and Troese/Hughes, which had a significant number of mortgage pay-offs that had not been made because the escrow accounts were depleted as a result of theft, errors and omissions.

In the spring of 2008, Troese entered into new agency agreements with Chicago Title for three title companies, including Troese/Prestige. Thereafter, Troese/Prestige also served the clientele of Troese/Hughes and Troese Title. Troese/Prestige conducted settlements, but instead of using the lender money that was wired into Troese/Prestige’s escrow account as directed in the HUD-1 settlement statements, the money was transferred into escrow accounts at Troese/Hughes and Troese Title to cover the mortgage pay-off checks that were still outstanding for those entities.

In the summer of 2008, Chicago Title received information that a mortgage had not been paid off and audited Troese/Prestige. The escrow account did not contain enough money to cover the outstanding mortgage pay-offs. Chicago Title, as the title insurer, was forced to make the mortgage pay-offs, to pay off funds that had not been made by Troese/Prestige, and one mortgage that still had not been paid off by Troese Title. In total, the loss to Chicago Title stemming from the Troese/Prestige pay-offs was approximately$1.7 million.

The total loss attributed to Troese as a result of the above schemes was$2,838,231.

James Kevin Hughes, age 53, ofCrownsville, Maryland, andBrenda Lukenich, age 51, ofHughesville, Maryland, previously pleaded guilty to wire fraud and mail fraud, respectively. Hughes and Lukenich each face a maximum sentence of 20 years in prison at their sentencing, scheduled forFebruary 15, 2012andFebruary 28, 2012, respectively.

The Maryland Mortgage Fraud Task Forcewas established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at the Department of Justice.

Commercial Title Searches Have Many Caveats

In preparing a zoning report for a proposed ethanol plant, Chicago Title apparently missed the names of several nearby homeowners, who were therefore not served with legal notice of the planned construction. As the construction became more imminent, neighbors found out and quashed the transaction, causing Chicago Title a $48.4 million loss. See more details at Ethanol Producers magazine.

 

CLAYTON, Mo. (CN) – A St. Louis County jury awarded $48.4 million to an ethanol company against a title company that failed to notify property owners near a site where the ethanol company wanted to build a plant near Wichita. The award, after a 2-week trial, is the largest ever in St. Louis County Court.
Abengoa Bioenergy wanted to build a plant in Colwich, Kan. Chicago Title was supposed to notify nearby property owners in order to obtain zoning to build it, but seven property owners were left off the notification list.
After zoning was granted, the property owners found out and sued in 2008. Abengoa was forced to build a more expensive, less profitable plant in Granite City, which was finished 15 months after the first plant was supposed to be completed.
The award includes the higher cost of building the plant in Granite City, the cost of the 15-month delay and the lower revenue from the plant.

John L. Davidson, Esq.

13975 Manchester, Suite 19

Saint Louis, Missouri 63011

Fred Kirby, of Chicago Title, Dies at 91

Fred Kirby, longtime chairman and chief executive of Alleghany Corporation sold its biggest asset, Investors Diversified Services (IDS) to the American Express Company for $800 million in 1983.  In 1986  he moved the proceeds into Chicago Title and Trust Company and the Security Union Title Insurance Company to make them the biggest players at the time in the title insurance industry.  More detail on Mr Kirby’s life at the New York Times

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.

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.

Chicago Title Files Suit Against Attorney Agent

Chicago Title has a civil case pending against its agent, Robert Steuk, a disbarred New Hampshire Attorney who owned Warranty Title Company, Inc. Chicago Title reportedly received at least 40 claims related to real-estate closings facilitated by Steuk’s escrow company with fraudulent transfers estimated at $1.3 million. However, as part of Monday’s plea agreement, federal prosecutors agreed to stipulate that the losses were more than $400,000 and less than $1 million. Steuk illegally wired sums of money ranging between $10,000 and $130,000 to accounts held by himself or family members.  Steuk faces up to 20 years in prison for his deeds. Read More at Mail Tribune  or  SeaCoast.

Info On Home Closing

Home Closing 101: An Educational Initiative of the American Land Title Association