Thorny Issue In Deed

Monday, November 17, 2008


Times Herald Staff


NORRISTOWN — The “Uniform Municipal Deed Registration Act,” which takes effect on Dec. 8, basically pits the officials of 29 Pennsylvania townships and municipalities against the real estate title insurance industry, the lawyers who preside over residential “settlements” of sales and even county officials who are required to “record” a deed after the sale.  


This article demonstrates the ongoing battle between city, county and private sectors, all with the very best interests of the public, but each looking at issues from only their respective viewpoint. The same battle has been forged elsewhere, and undoubtedly will be again, but looking at the BIG picture, the documents must go of record immediately after closing, or lenders will not lend, and the lack of money available for sales will be a much bigger problem for the city than some  repairs. Read Times Herald full article by clicking here and post your thoughts.

Behemoth Title Insurance Merger Announced

No. 2 ranked Fidelity National announced an enormous, mother of all acquisitions  in the title insurance industry on Friday, saying it will acquire No. 3 ranked LandAmerica. The Jacksonville, Florida-based Fidelity plans to acquire Richmond, VA based LandAmerica Financial Group Inc. for about $128 million in Fidelity stock. The acquisition will put many locally known subsidiaries, branded under the names of Chicago Title, Fidelity National Title,Ticor, Security Union, Alamo Title Insurance, along with LandAmerica brands American Title Company of Livingston, Atlantic Title & Abstract Company, Channel Islands Escrow, Inc., Commonwealth Land Title Company, Gateway Title Company, Golden Escrow, Inc., Gulf Atlantic Title, Land Title Agency, Inc., LandAmerica Albuquerque Title Company, Lawyers Title of Nevada, Rainier Title Company, Southland Title Corporation, StoneRidge Escrow Corporation, USA Title Affiliates, Inc. and others under one company umbrella that will control somewhat under 50% of the total title insurance market for the entire US market, passing the currently No. 1 ranked company for volume, First American Title.

Virtually all title companies, including Fidelity National and LandAmerica have taken drastic steps over the last year cutting jobs, closing offices and slashing dividends to curb losses under the debacle of the subprime mortgage meltdown scenario that resulted in the current credit freeze and seriously depressed real estate market. In response, Fidelity halved its dividend and cut over 1,000 job along with an across-the-board 10 percent pay cut for employees in the last quarter. LandAmerica was looking for a company to acquire it.

The joint  announcement said that LandAmerica Chairman and CEO, Theodore Chandler will join Fidelity National’s Bill Foley as a vice chairman when the sale is complete. The headquarters of the company will remain in Jacksonville, FL. There will be some consolidation of back office activities, which probably will results in an increase in employment in the Jacksonville FL area. Fidelity employs about 500 people at its Riverside Avenue headquarters. Two other companies spun off from Fidelity employ about 2,500 in Jacksonville. Foley said there probably will be jobs lost in Richmond, VA as the merged company focuses on synergies and cost-cutting. Fidelity estimates the merger should bring at least $150 million in operational costs savings between the two firms, but did not specify how many jobs would be lost.
Fidelity investors liked the value of the acquisition and shares of other major title insurers also rose Friday after news of the proposed merger. Fidelity’s stock rose $2.88 to $11.23 Friday after the deal was announced. LandAmerica, which had fallen to a record low on Thursday, rose $3.95 to $8.70 on Friday. Shares of competitors First American were up 18% while Stewart Title also increased 7%.
The company expects the deal to close by March 31, 2009.

Find More information and detail at Reuters

Find More information and detail at Jacksonville

Find More information and detail at Housing Wire







New Legislation Imposes Stricter Guidelines on California Title Insurance Industry

by Jarrod Clabaugh,  Printed with permission from Source of Title
Governor Arnold Schwarzenegger signed Senate Bill 133 into law on September 25, 2008. The legislation implements greater controls over the practice of title insurance in California. Introduced by Senator Sam Aanestad in January 2007, the bill focuses on inducements offered by title marketing representatives to real estate agents and brokers in exchange for the steerage of business to their title insurance companies. The bill was supported by both the California Department of Insurance and the California Land Title Association.
The bill provides the department of insurance with significant new powers to regulate marketing practices in the title insurance industry. In particular, the bill creates the first program in the country to register and regulate title company sales representatives.

According to the bill, a person is prohibited from being employed as a title marketing representative unless he or she holds a valid certificate of registration issued by the commissioner for a three-year period. Should a person market title insurance without a valid certificate, the commissioner can issue a cease and desist order prohibiting that person from further marketing.

Additionally, under the legislation, title companies must notify the commissioner when a title marketing representative is hired or terminated. It also establishes an application process for the certificate of registration and allows the commissioner to set a fee to obtain or renew a certificate in an amount sufficient to defray the actual costs of processing it. The legislation states this cost cannot exceed $200.

The submitted application must contain several facts about the applicant, including the person’s residential address, principal business address, and the applicant’s mailing address. The applicant must also submit a statement, signed by an officer of the business by whom the applicant is or will be employed, certifying that the applicant will be provided training within 60 days of the hiring date or date of application. The applicant must submit another statement as to whether he or she has previously had a certificate of registration revoked, suspended or denied.

Should a marketing representative violate any terms of the state’s title insurance code, the legislation states that the department can revoke, suspend, restrict or decline to issue a certificate of registration if it determines at a hearing that the representative did violate the law. Additionally, any title marketing representative who has his or her certificate revoked by the department is not permitted to reapply for another certificate of registration with the department for five years from the date of revocation.

The legislation also establishes that it is unlawful for any title insurer, underwritten title company or controlled escrow company to pay, directly or indirectly, any commission, compensation, or other consideration to any person as an inducement for the placement or referral of title business. The actual placement or referral of title business is not a precondition to a violation of this section, whether the violation is or is not a per se violation pursuant to subdivision.

While the legislation sets many guidelines as to what is considered an inducement, one particular aspect that alarms title agents is they can no longer pay for anyone’s food, beverage or entertainment but their own.

“So no more free lunches for clients,” said Greg Knowles, an agent with Lawyers Title in Santa Barbara. “That is a huge change in our business. I am having a hard time thinking I can’t take a good customer to lunch. I can’t take one of them to a baseball game or local sporting event.”

“Competing specifically on the quality of the work we do and the price we charge probably isn’t the worst outcome in the world,” he added. “I do have many close friends in this business that my wife and I may invite over for dinner, is that illegal as well?”

The legislation mandates that representatives can continue to provide parties with promotional items with a permanently affixed company logo so long as each individual item’s value does not exceed $10. These gifts, however, cannot be gift certificates, gift cards or any other item that has a specific monetary value.

The legislation states that the provision or payment of any form of consideration as an inducement for the placement or referral of title business not specifically set forth in the bill will be considered unlawful and is, thus, prohibited.

“Restricting the illegal activities by title marketing representatives is a win for businesses and consumers,” said Steve Poizner, the department of insurance’s commissioner. “By curtailing the practice of real estate agents and brokers recommending a specific title insurer to their clients due to incentives provided by title marketing representatives, competition and transparency are fostered in the insurance marketplace.”

The legislation was the culmination of several years of effort by the department of insurance to address the growing problem of inducements. While such practices are illegal, the department had no enforcement authority over the individuals who used them before this legislation was signed. Now, the department is provided with regulatory oversight of title marketing representatives.

“Senate Bill 133 enhances consumer protection while maintaining the healthy, competitive title insurance marketplace in California,” said Craig Page, the executive president of the CLTA. “The legislation is just the latest example of the industry’s effort to promote consumer choice in the title insurance market. The competitive market in California has led to title insurance rates that are below the national average according to”

“Senate Bill 133 is win-win legislation for California,” Aanestad said. “It is pro-business and it is pro-consumer. By curtailing the practice of some real estate agents and brokers who recommend a specified title insurer to clients due to the use of incentives offered by some title marketing representatives, it promotes real competition in the title insurance marketplace. Competition among insurers can transfer into lower rates and a better deal for homebuyers.”



Simple Title Search Could Have Saved Two Lives

by Robert Franco | 2008/08/12 |

Reprinted with permission from

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.

Judge Fines Law Firms $150K for Listing Wrong Lender

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.”

Mark-ups may be an Ethics Trap for a Law Firm

aba journal report
THE TRAP: My Boss Made Me Do It

When John B. Bowden started work as a managing associate for the Forquer Law Firm in Greenville, S.C., he was in for an unpleasant surprise. Bowden discovered that the firm was inflating government recording fees on settlement statements for HUD-1 real estate transactions. When he asked his boss in the Charlotte, N.C., office about it, Robert Forquer told him the practice was legal and ethical.

Wrong answer. The South Carolina Office of Disciplinary Counsel informed Bowden that the firm’s Greenville office failed to keep sufficient records of recording fee charges and failed to track client funds relating to those fees. Even worse, Forquer was apparently using excess fees to cover office expenses and make various payments to himself, according to a ruling by the South Carolina Supreme Court in a disciplinary action against Bowden.

Fortunately for Bowden, he wasn’t aware of the misuse of funds. But in an agreement with the ODC that resulted in a reprimand by the court, Bowden acknowledged that it was his duty to tell clients that their bills were inflated and to assure that HUD-1 forms were accurate in closings he supervised. He also acknowledged an ethical duty to assure that other lawyers in his office complied with state ethics rules. In the Matter of John B. Bowden, No. 25978 (May 9, 2005).

LandAmerica Financial moves Title Underwriting Offices

In a strategic move, LandAmerica announced that it is moving underwtriting offices for Commonwealth, TransNation, and Lawyers Title (previously domiciled in Pennsylvania, Arizona and Virginia, respectively) to Omaha, NE

“Consolidating the underwriting companies’ domicile and corporate governance into one state enables LandAmerica to comply with a single set of regulations administered by the Nebraska Department of Insurance. Nebraska tax law allows LandAmerica to save on retaliatory premium taxes, which are computed and charged on policies written by the company.” says emediawire.

Read full LandAmerica Article

Info On Home Closing

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