TITLE UNDERWRITERS ISSUING RESTRICTIONS TO AGENTS ON SECURITIZED MORTGAGES

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

see MD Foreclosure INDEMNITY AGREEMENT

EDITOR’S NOTE: WHETHER IT IS IN WRITING OR NOT, VIRTUALLY ALL TITLE INSURANCE UNDERWRITERS THAT ARE INDEPENDENT FROM THE MEGA-BANKS ARE ISSUING DIRECTIONS AND RESTRICTIONS REGARDING INSURING TITLE ON PROPERTY INVOLVING ANY ALLEGATION OF SECURITIZED MORTGAGES AND ESPECIALLY IF THEY ARE INVOLVED IN FORECLOSURE.

The bottom line is that title is most likely clouded, defective, unmarketable or fatally defective starting with the closing on the loan, and compounded by the various pieces of chicanery, fabricated documents, forgeries and other deceptions being played out in foreclosure process across the country.

Here is an example from Stewart Title. In order to issue commitment in Maryland, the checklist they have published is as  follows:

Stewart Bulletin

Commitment:

Foreclosure action filed in Circuit Court for ___________ County, Maryland Case No. _______________ against _______________ in regard to that certain deed of trust recorded in liber ______ at folio ___________ TO BE DISMISSED WITH PREJUDICE or, if the property is to be conveyed pursuant to the foreclosure case, verification of compliance with Maryland Real Property Code Sections 7-105 et seq., Maryland Rules 14-201 et seq., and Maryland Rules 14-301 et seq. including review of the following:

  • Order to Docket containing the following items:

1. Affidavit of default;

2. Notice of intent to foreclose;

3. The original or a certified copy of the deed of trust;

4. A statement of the debt remaining due and payable supported by an affidavit of the plaintiff or the secured party or the agent or attorney of the plaintiff or secured party;

5. A copy of the debt instrument accompanied by an affidavit certifying ownership of the debt instrument; and

6. A copy of the deed of appointment of a substitute trustee.

  • If Order to Docket filed on or after July 1, 2010, copy of the Final Loss Mitigation Affidavit filed and served with the Order to Docket, or if not so filed and served, filed at least 30 days before the sale, but not sooner than 28 days after filing Order to Docket.
  • Affidavit of mailing of notice of intent to foreclose (Must have been sent no sooner than 45 days after default under the note and at least 45 days prior to the filing of the Order to Docket).
  • Proof of personal service of Order to Docket (including all other papers filed) on owner/borrower in accordance with the provisions of Maryland Rule 14-209.
  • If Mediation requested by borrower, report from Office of Administrative Hearings showing outcome of Mediation.
  • Proof of Publication of Advertisement of Sale (must be published once a week for 3 weeks; first publication must not be less than 15 days prior to the foreclosure/last publication not more than one week prior to foreclosure sale. (NOTE: A sale may not be advertised until 20 days after the Final Loss Mitigation affidavit is filed, but if a request for Mediation is filed within that time and not stricken, a sale may not be advertised until the report from the Office of Administrative Hearings is filed with the court).
  • Verification that the foreclosure sale was made at least 45 days after personal service on mortgagor and owner of Order to Docket.
  • Proof of Notice of Sale on all junior or subordinate lien holders in accordance with the provisions of Maryland Rule 14-206(b)(2) and (3).
  • Proof of bond filed prior to sale.
  • Report of Sale filed within 30 days following the sale. (NOTE: Report must contain an affirmation of the fairness of the sale and the truth of the report.)
  • Affidavit of Purchaser.
  • Clerk’s notice following sale (order nisi) stating that the sale will be ratified unless cause to the contrary is shown within 30 days. A copy of such notice shall be published at least once a week in each of three successive weeks before the expiration of the 30-day period.
  • Final Order of Ratification.
  • If objections to sale filed, time to appeal must have expired (i.e. 30 days from entry of order of final ratification).
  • Receipt of adequate proof that the borrowers/property owners are not currently under the protection of the Bankruptcy Court and/or were not in bankruptcy before or during the foreclosure process. If bankruptcy filed by owner/borrower, Order of bankruptcy court lifting the automatic stay as to foreclosed deed of trust.
  • Receipt of adequate proof that the property owners are not currently on active duty in the U.S. Military.
  • Receipt of adequate proof of proper notice to the IRS of its subordinate lien, if applicable.
    Evidence that 120 days have passed since the date of foreclosure sale OR receipt of waiver from the IRS of their right to redeem the foreclosed property, if applicable.
  • Proof that the borrower/foreclosed owner has vacated the property and that it is not occupied by anyone claiming rights under or through such person.

Further underwriting considerations:

  • Did all record owners sign the deed of trust foreclosed on?
  • Was a trustee listed on the deed of trust?
  • Was the legal description correct?
  • Was there a substituted purchaser? Was that purchaser approved by the court in the foreclosure case?
  • Were all subordinate lienholders notified prior to sale? See Affidavit of Compliance.
  • Was the Appointment of Substitution of Trustee dated and recorded prior to the filing of the foreclosure?
  • Review the foreclosure docket carefully. Has an independent auditor or special master been appointed by the court to review the case file and is the court awaiting a determination from that auditor? Was a Show Cause order issued to the trustee/attorney to report to the court the sufficiency of the affidavits?
  • Is the foreclosed deed of trust an indemnity deed of trust (IDOT)? If so, make certain that you have collected sufficient recordation taxes to cover the cost to record the trustee’s deed to the re-purchasing lender.
  • All powers of attorney utilized by REO lender must be recorded or submitted for review prior to closing.
  • If you have any questions relating to this or other bulletins, please contact your local underwriting personnel or Stewart Legal Services.

MD2010007

Date: December 17, 2010
To: All Maryland Issuing Offices
RE:

Insuring at or after Mortgage or Deed of Trust Foreclosure in Maryland

Dear Associates:

Recently there have been numerous articles disseminated concerning the validity of foreclosures in Maryland. The concern has been over certain affidavits and averments filed in connection with foreclosures handled by the law firms of Bierman, Geesing, Ward and Wood, LLC (Bierman), Covahey, Boozer, Devan and Dore, P.A. (Dore) and Buonassissi, Henning & Lash, P.C. (Buonassissi). These claims involve allegedly fraudulent or forged affidavits executed by parties representing the foreclosing lenders and trustees. Additionally, new legal developments (described below) have changed the foreclosure landscape and the way in which title insurance can be offered. As such, we require all issuing agents to be extremely vigilant when reviewing title at or after a foreclosure (including any foreclosure appearing in the chain of title within the last three years from the date of your current vesting deed). Despite the new requirements listed below, you must continue to follow all underwriting requirements outlined in any Stewart Bulletins.

On October 19, 2010, the Maryland Court of Appeals approved emergency rules to allow the hiring of part-time examiners to scrutinize affidavits and other documents submitted in a foreclosure case. The rules also clarify the discretion given to Circuit Court judges to require attorneys or trustees in each foreclosure suit to appear to explain any anomalies in the affidavits submitted as part of the foreclosure suit and defend a possible cause for dismissal.

Additionally, on October 13, 2010, a class action lawsuit was filed in the U.S. District Court for Maryland against the law firm of Bierman, Geesing, Ward & Wood, LLC (BGW) alleging a variety of deficiencies with respect to foreclosures handled by BGW as Trustee. The case reference is 8:10-cv-02822 (Greenbelt Division). The class action plaintiffs allege that certain affidavits filed in BGW foreclosures were false because the affidavits were not actually executed by the trustees, themselves. The plaintiffs also allege that, from 2004 to the present, BGW executed foreclosure Trustees’ Deeds through use of clerical employees rather than the Trustees, themselves, and that such signatures and accompanying notary acknowledgements are false. The class action suit includes a request for declaratory relief, including a determination that a foreclosure filed “by other than a trustee or attorney is void and confers no jurisdiction on the court” and that a trustees’ deed “actually executed by a person(s) other than a trustee is void … and transfers no interest in real property.”

Another suit was recently filed in U.S. District Court, Reginald Jones v. HSBC Bank, N.A. et al., case number 09-2904 alleges that the Defendants (including employees of Buonassissi) “knowingly and willfully filed false, fabricated, and counterfeit documents in support of the Order to Docket in every, or virtually every, foreclosure docketed… .” Plaintiffs are asking for similar relief as stated in the Bierman case above including releasing the foreclosed borrowers from their obligations under the deeds of trust.

Mandatory requirements when insuring title from or after a foreclosure in Maryland:

1.) Insuring at the foreclosure (i.e. investor purchaser at the courthouse steps or offering new owner’s title policy to a lender after repurchasing the property):

a.) Do not insure a purchaser or lender at the foreclosure, unless you secure Underwriter approval.

2.) Insuring after a foreclosure has been finally ratified by the court (i.e. a final order ratifying the auditor’s report or final order granting possession) or it is an REO sale to a purchaser for value and securing an institutional lender:

a.) If the current foreclosure was filed by Bierman, Dore or Buonassissi offices, do not insure unless:

i.) Stewart’s state counsel reviews the entire foreclosure file. You must copy state counsel on all pleadings including all affidavits, corrective affidavits, docket entries, etc., and you must run judgments on the foreclosed borrower(s) as plaintiffs(s) to be certain that they have not filed a lawsuit against the foreclosing lender, Bierman, Dore or Buonassissi, excepted or objected to the foreclosure, or filed a lis pendens against the property; and

b.) On any foreclosure file that discloses that a corrective affidavit has been filed AFTER the foreclosure sale has been ratified, we will not agree to insure without a signed indemnity agreement from the foreclosing lender (see form attached). We will only accept an indemnity from an institutional lender that you are familiar with. Do not insure any foreclosures whereby the lender involved is a private (hard money) non-institutional lender without first securing approval from state counsel. The indemnity must be executed by an authorized representative of the lender.

c.) If foreclosure was filed by law firm other than Bierman, Dore or Buonassissi, review foreclosure file to determine that all affidavits appear signed by the proper attesting party, they are sufficiently notarized where applicable and no corrective affidavits or exceptions have been filed in the matter.

3.) You may continue to insure titles without review of the foreclosure documents listed above where the property is held in the name of a bona fide purchaser who purchased from a purchaser following an REO foreclosure sale, the property is owner occupied/principal residence and the ratification of the foreclosure sale occurred at least three years back in the chain of title. You must continue to follow all Stewart search guidelines and judgment parameters as previously issued.

Please note that foreclosures in general may continue to be attacked and you must be vigilant when reviewing these matters. Please be sure to keep informed of all new developments and communications concerning this ongoing dilemma and contact state counsel for any updates.

STRUCTURING THE COMMITMENT ON MARYLAND FORECLOSURES

Review the Deed of Trust/Mortgage to confirm that the foreclosure complied with its terms, and then ADD the following requirements to Schedule B-1 of the Commitment:

Foreclosure action filed in Circuit Court for ___________ County, Maryland Case No. _______________ against _______________ in regard to that certain deed of trust recorded in liber ______ at folio ___________ TO BE DISMISSED WITH PREJUDICE or, if the property is to be conveyed pursuant to the foreclosure case, verification of compliance with Maryland Real Property Code Sections 7-105 et seq., Maryland Rules 14-201 et seq., and Maryland Rules 14-301 et seq. including review of the following:

  • Order to Docket containing the following items:

1. Affidavit of default;

2. Notice of intent to foreclose;

3. The original or a certified copy of the deed of trust;

4. A statement of the debt remaining due and payable supported by an affidavit of the plaintiff or the secured party or the agent or attorney of the plaintiff or secured party;

5. A copy of the debt instrument accompanied by an affidavit certifying ownership of the debt instrument; and

6. A copy of the deed of appointment of a substitute trustee.

  • If Order to Docket filed on or after July 1, 2010, copy of the Final Loss Mitigation Affidavit filed and served with the Order to Docket, or if not so filed and served, filed at least 30 days before the sale, but not sooner than 28 days after filing Order to Docket.
  • Affidavit of mailing of notice of intent to foreclose (Must have been sent no sooner than 45 days after default under the note and at least 45 days prior to the filing of the Order to Docket).
  • Proof of personal service of Order to Docket (including all other papers filed) on owner/borrower in accordance with the provisions of Maryland Rule 14-209.
  • If Mediation requested by borrower, report from Office of Administrative Hearings showing outcome of Mediation.
  • Proof of Publication of Advertisement of Sale (must be published once a week for 3 weeks; first publication must not be less than 15 days prior to the foreclosure/last publication not more than one week prior to foreclosure sale. (NOTE: A sale may not be advertised until 20 days after the Final Loss Mitigation affidavit is filed, but if a request for Mediation is filed within that time and not stricken, a sale may not be advertised until the report from the Office of Administrative Hearings is filed with the court).
  • Verification that the foreclosure sale was made at least 45 days after personal service on mortgagor and owner of Order to Docket.
  • Proof of Notice of Sale on all junior or subordinate lien holders in accordance with the provisions of Maryland Rule 14-206(b)(2) and (3).
  • Proof of bond filed prior to sale.
  • Report of Sale filed within 30 days following the sale. (NOTE: Report must contain an affirmation of the fairness of the sale and the truth of the report.)
  • Affidavit of Purchaser.
  • Clerk’s notice following sale (order nisi) stating that the sale will be ratified unless cause to the contrary is shown within 30 days. A copy of such notice shall be published at least once a week in each of three successive weeks before the expiration of the 30-day period.
  • Final Order of Ratification.
  • If objections to sale filed, time to appeal must have expired (i.e. 30 days from entry of order of final ratification).
  • Receipt of adequate proof that the borrowers/property owners are not currently under the protection of the Bankruptcy Court and/or were not in bankruptcy before or during the foreclosure process. If bankruptcy filed by owner/borrower, Order of bankruptcy court lifting the automatic stay as to foreclosed deed of trust.
  • Receipt of adequate proof that the property owners are not currently on active duty in the U.S. Military.
  • Receipt of adequate proof of proper notice to the IRS of its subordinate lien, if applicable.
    Evidence that 120 days have passed since the date of foreclosure sale OR receipt of waiver from the IRS of their right to redeem the foreclosed property, if applicable.
  • Proof that the borrower/foreclosed owner has vacated the property and that it is not occupied by anyone claiming rights under or through such person.

Further underwriting considerations:

  • Did all record owners sign the deed of trust foreclosed on?
  • Was a trustee listed on the deed of trust?
  • Was the legal description correct?
  • Was there a substituted purchaser? Was that purchaser approved by the court in the foreclosure case?
  • Were all subordinate lienholders notified prior to sale? See Affidavit of Compliance.
  • Was the Appointment of Substitution of Trustee dated and recorded prior to the filing of the foreclosure?
  • Review the foreclosure docket carefully. Has an independent auditor or special master been appointed by the court to review the case file and is the court awaiting a determination from that auditor? Was a Show Cause order issued to the trustee/attorney to report to the court the sufficiency of the affidavits?
  • Is the foreclosed deed of trust an indemnity deed of trust (IDOT)? If so, make certain that you have collected sufficient recordation taxes to cover the cost to record the trustee’s deed to the re-purchasing lender.
  • All powers of attorney utilized by REO lender must be recorded or submitted for review prior to closing.
  • If you have any questions relating to this or other bulletins, please contact your local underwriting personnel or Stewart Legal Services.

EXHIBIT – INDEMNITY AGREEMENT

(CLICK TO VIEW)

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF ALL CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AND ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SECURED, SHARED, OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
References
Bulletins Replaced:

MD2010006 This bulletin has been replaced.

Related Bulletins:

SLS2010023 Insuring at or after Mortgage or Deed of Trust Foreclosure

Underwriting Manual:
Exceptions Manual:
Forms:

10 Responses

  1. rI am filing involuntary bankruptcy petition, SIPA litigation, nun pro tunc quiet title action against Ally Financial and requesting that the SEC and FTC deny Ally Financial and all its alias’ from trading on the stock exchange.

    Many of the borrowers that purchased during these years have been given bad repres.  But having been in my residence on March 2, 2011 with the RE-MAX realtors parked in his black mercedes and the alameda county sheriffs showing up un-announced at the request of the alameda county counsel Raymond Lara with an old writ of possession “No cash for keys stipulation that has come up missing.  the law firm of Schultz stated at the courthouse that the judge Clay was not going to change his mind so sign this paperwork that you will walk away from the property.  We obtained from Judge John True III by paying cash to the clerk of court an extension to find out what happened to two hundred thousand purchase money paid.  Then found out that world bank had closed and was bought by wachovia.  
    The biggest news that I have personally found out which effects many cases is that Ally bank owns 10 percent of MERSCORPS, Inc and they are being sued by the United States chapter thirteen trustee locke barkley which I personally flew to jackson mississippi on way to aberdeen to give all the documents of the fee spliting and substitution of trustee between cal-western reconveyance previously known as cal western trust deeds, inc in the same physical office at 525 E. Main Street el cajon california as PITE DUNCAN & MELMET since 1987.
    When you appear in bankruptcy court you are required to tell the parent corporation and state of incorporation.  Wells fargo according to the california secretary of state records where I personally appeared and paid 60  dollars for the secretary of state to serve Wells Fargo N.A.  the secretary of state came back stating that i was required to get a order from the Judge allowing substitution of service on a foreign corporation as wells fargo [6745 locations] is not a california corporation since 1923 it has continuosly filed as Delaware corporation.  This has been brought to the attention of FBI Mortgage-Sec Division at 4400 Orange Grove, Sacramento California.  There was no mention that the loans afforded to the borrowers were not money owned by the bank.  had the delicate time sensititive pay back arrangements that the banks as servicers as in the decisions in bankruptcy cases recently will support been explained the borrowers and occupants would had taken the course of study i have been flung into open book how to track title and note and checked the business licenses and parent corporations and their aliases before signing the notes.
    The banks and especially the media give the OBAMA Bailout very very very bad press when in fact he did just what he was elected to do protect the constitution and our rights to property.  By this bailout they bought the lending portfolio of the failed Parent Company that filed bankruptcy in 2008 but had applied to become a holding company to qualify for the bailout money.  The deeds of trust were given as security to the trusts that gave the banks the FISA Fixed Interim Sales Agreement, and agreements to buy the mortgage portfolio that the bankruptcy judge told Wells Fargo they had 15 worthless mortgages and FMI filed bankruptcy.  
    you ask what is the connector.  I Say why is it necessary for substitution of trustee prior to alleged default of borrower while the bank selling prommis solutions holdings, inc bought the mortgage portfolios under 20 year contracts with pite and duncan, mccallyer raymer, and they through power of attorney filed in Buffalo Bankruptcy case 11-10516 and powers of attorney from HSBC Bank Shanghai Banking Corporation to michael d webb & associates whom have a office a 1853 9th avenue, oakland california according to their REO Harold Jospeh Hutchens affilated brokers; he waited 28 months on these locations and when keys for rental payments to the pite and duncan trusts not to the banks on the mortgage statements he brings portable dumpsters and files unlawful detainers and the borrowers file bankruptcy case their attorneys file chapter sevens as opposed to chapter fifteens because foreign banks have bought corporation in the state and the clerks of the courts do not require their business license attached to the court filings.  so the PRESIDENT did great when he enacted that bailout because these banks had they been factual we would not have pulled our money out we saw it is a wonderful life.  
    sOMETHING VERY IMPORTANT YOU HAVE TO READ THE NAME ON THE ATTORNEY SENDING ANY DOCUMENTS AND COMPARE THEM WITH THE SEC FILING AGENT FOR SERVICE THE BANK AND THE BANK AS A HOLDING COMPANY DOES NOT HAVE THE SAME AGENT FOR SERVICE THE TO FASTEST WAYS IS UNLAWFUL DETAINER LISTING EACH PERSON INCLUDING THE JUDGE OR CLERK THAT ENTERED THE CASE IN THE FIRST PLACE BECAUSE THEY CARRY ERROR AND OMMISSION INSURANCE, REPORT THE FILING LAWYERS TO THEIR STATE BARS AND ASK ARE THEY THE AGENT FOR SERVICE, FILE WITH THE REAL ESTATE BOARD A COMPLAINT THAT [RESIDENTIAL BURGLARY] MEANS THEY USE OFFICERS OF THE COURT FOR A PRIVATE CITIZENS TO TAKE YOUR PROPERTY

  2. Anonymous. I agree. I have seen broken titles EVERYWHERE. I am just doing some case studies with non-judicial foreclosure, short sales and regular sales. Titles are broken and lifted by servicers with a infamous robo-signers using ELECTRONIC SIGNATUREs….

  3. I find this website very interesting.

    http://www.alta.org/publications/titlenews/10/2010.cfm

  4. Flaws in mortgage title is not just for foreclosures — rampant.

  5. Securitization of Mortgages is what enables Judges and other members of Public Pensions to invest in our tourture and misery. Judges are bound by Law and yet both the district court and now the 9th circuit have failed to even cite Sec. 1635 and which part states that relief can be denied sua sponte > http://www.scribd.com/doc/46005118/Impossibly-Tyrannical-Judges . Now I’m going to have to file a motion for rehearing En Banc (which will probably get the same results), and then have to file a petition for certiorari with the SCOTUS, which God know if they’ll even hear it. Nothing in TILA’s Rescission section even requires any court action at all, so why are they doing this? I think every Man and Women serving in the Military should know that this is how they’ll be treated as a Veteran.

  6. Can someone point me to a “QT” primer ,, the do’s and don’t’s in Florida … I am not yet in foreclosure and am going the delay/modify route , I’m represented but my lawyer isn’t really “with it”. The way I see it stirring up the mud is the best defense ,, why foreclose if you can never resell it?

  7. Dave Krieger
    Has there be much success with QT in nonjudicial states?Any ca cases that you can point out with potential merit for QT in ca? Are any of these in your book?
    thanks

  8. CLOUDED TITLES UPDATE:

    From Dave Krieger, working as a paralegal with the attorneys in the following situations:

    For those of you in Phoenix, two quiet title actions have been filed in the Maricopa County Superior Court and another is pending and should be filed shortly.

    Four quiet title actions have been filed in Washington State; two in Missouri; two in Texas; there are 4 attorneys in Florida (Tampa, Orlando, and Miami areas) that have now taken an interest in bills of quia timet and 1 attorney in Savannah, Georgia.

    You can have your attorney email us with further contact information and matters relating to your specific case to cloudedtitles@gmail.com. You will need to get certified copies of all documents at your county courthouse starting with the General Warranty Deed, forward, as counsel will want to review these.

    I have been retained by several attorneys to do chain of title assessments and pleadings for the above cases. I am working under their attorney privileges. I do not do pro se pleadings … sorry.

    NEW INFORMATION UPDATE: A judge in Kansas City, Missouri has accepted a title company declination letter as evidence of chain of title disruption and uninsurability of title … on the record! (Jackson County Circuit Court).

    The funny thing about quiet title actions? Even though you think not that many attorneys know about how to do a quiet title action … think about the foreclosure mill attorneys and trustees that are getting served with quiet title actions … they don’t know anything either!

    For more information, get the book CLOUDED TITLES … at http://www.cloudedtitles.com
    http://www.cloudedtitles.com

  9. We are monitoring this situation closely directly with Stewart Title, as well as Chicago Title. Once the quiet title suits start getting filed in batches all over the U.S. the title companies are going to re-examine their strategies once again. For more information about homeowner’s indemnity policies, visit http://www.cloudedtitles.com

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