TITLE INSURANCE: VIEW FROM THE OTHER SIDE

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

Submitted by Ron:

SEE  title-companies-and-agents-brace-for-worst-year-of-their-existence

SEE STEWART TITLE BULLETIN AFTER RON’S COMMENT BELOW

See Ron’s Comment Below

EDITOR’S RESPONSE: Ron’s comment is chock full of true facts. His problem is that he hasn’t caught on to the relevance.

  • Will the title carrier pay or “fix” the title defect once it determined that either the recorded documents were or are invalid or will they pay or “fix” the defect once it is determined the other way —
  • that the homeowner was mislead as to the identity of the lender when the title agent either knew who the real lender was or at least knew that the real lender was nowhere to be found on the mortgage papers?
  • Will the title carrier or title agent pay off under the title policy or their errors and omissions policy?
  • How can they fix anything?

And by the way the statement that the transactions were insured many times is completely true. It is only out of ignorance of securitization that one could say otherwise.

First of all many of the homes effected — millions of them — were financed, refinanced and then added HELOC’s and other instruments each of which is a separate event with a separate title policy and all of them are doubly insured by errors and omissions policy covering the title agent, especially if they acted as closing agent. Second of all insurance came in all shapes and sizes and there would no doubt be competing claims against each party who could have a liability under an insurance contract, credit default swap, guarantees etc  and various cross-allegations about misleading information.

There can be no doubt that multiple insurance contracts exists, some of the same kind, some insuring the same interest and some insuring and indirect interest. What is relevant is that these multiple policies exist and the possibility of multiple payouts on the same property subject to varying insurable interests is already a proven point. Multiple payments from multiple sources have already occurred.

So much ignorance about title insurance expressed here, it’s hard to know where to begin. For the people who want title insurers flattened or who think they are evil. Don’t buy an owner’s policy next time. Roll the dice. And see what happens.

Why did title agents close their doors? Because they are going broke for lack of real estate transactions. Wouldn’t Walmart close its doors if customers stopped coming in?

The bloggers main point that title insurers have insured each transaction so many times is completely wrong. There is a policy for the owner and the lender. Only one lender can recover. Not 6.

I am always disheartened to see articles or blogs about title insurance in which the bloggers or commenters obviously know so little about what they speak of. Title insurance is one of the best deals going for consumers for many reasons.

It is not helpful to fail to understand something and then spread the misunderstanding publicly, as has been done here. A little bit of research will show that title insurance is a claims AVOIDANCE line of insurance. Like boiler insurance, where boilers are inspected to make sure they will not blow up and claims are very low (thank goodness!), title insurance operates in much the same way. Do you know people who want a title claim on their house? Their most important possession? Of course not! So title insurers search the title to property, as well as numerous court and other records to discover AND FIX problems with the title BEFORE closing. In fact, in about 40% of all transactions, a problem is found and identified prior to closing. That means the claim is resolved beforehand and the consumer never even knows it happened! What a great service!

Please reread what I just said so that it’s clear. The majority of claims happen before the closing because problems are identified and fixed so that consumers will not have to suffer through most claims later on as homeowners. Many of these claims involve recent problems with title, such as lenders who failed to release mortgages of record. Others pertain to foreclosure issues, tax problems or other types of liens. Most are found, fixed and resolved before closing.

What title insurers do is the equivalent of the homeowner’s insurer cutting a tree branch before it destroys the roof of the house or the auto insurer fixing a car’s brakes before they go out and cause an accident. They save heartache, trouble and avoid most claims. I would argue that is more valuable to consumers than other types of insurance that allow the claim to happen. Most of the premium goes into this claim avoidance and curative work which is performed, usually, by the title insurance agent, who gets most of this premium as compensation for the important work performed. That is why there is less paid out with title insurance than other lines. Which way would you prefer? Put less into claims avoidance and let the claim happen to most American families or spend most of the premium dollar to fix the problem up front and help people avoid a title claim? It’s a no-brainer.

Moreover, title insurance is not paid annually like other lines of insurance. It’s paid only when you purchase or refinance a home. Let’s say you pay $1,000 for title insurance and $1,000 a year for homeowners and auto. You own a home for 15 years. Over that time, you pay only $1,000 for title and maybe up to $100 gets paid out in claims for matters not identified and fixed prior to closing. So you spent $900 to resolve most of the title problems beforehand, which was good for 15 years or $60 per year. Now look at what you would pay for auto and homeowners. For 15 years, you would pay $15,000 to each company and they would pay out (at 60%) $9,000. (This is generous since many people (like me) never had a claim at all on homeowners and only minor auto claims). In any event, the homeowner wound up “losing” $6,000 over 15 years which comes out to $400 per year. Title insurance is the better bargain.

Furthermore, and this is the clincher, you may not know that the existence of title insurance saves homeowners approximately $16 billion per year in the United States in lower lending costs (per information put together by the American Land Title Association). Because of title insurance, US lenders have less risk and are willing to give mortgages at lower costs than in other developed nations where title insurance doesn’t exist. This is an added monetary benefit of title insurance. I could go on and tell you how title insurers collect hundreds of millions of dollars in child support and delinquent tax and other payments, but I think you get the idea.

Apparently, some people would prefer that title insurance doesn’t exist and that nearly 50% (remember problems are found in title in 40%of all transactions before closing plus another 5-10% later) of homeowners have a title problem that could take thousands or tens of thousands of dollars to fix (plus attorney fees and litigation costs!) and put ownership of consumers’ homes at risk. They also want lenders to assume the risk of a title defect, thus forcing lenders to raise interest rates on every loan. The result would be that consumers would pay far more for mortgages than they would ever save by not paying for title insurance. Throw in the risk to 50% of consumers’ homes and you have an expensive, gut-wrenching and potentially devastating hardship created for American families. You still think title insurance is not valuable?

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If everything was as straightforward as title companies would have us believe, why are they issuing bulletins like this?

Stewart Bulletin

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.

21 Responses

  1. What happens if I never received a deed for over 6 years after closing and I refuse to pay till someone helps me receive a deed in my name; after 3 years demanding a deed, from a third party sale and the seller to me died. There was a big cloud over the deed. I also was approved for a new house through a state funded program to tear down my old house and rebuild a new house, but could not do so for lack of a deed and not being able to homestead. I lost more than I borrowed by not having a deed in my name. Who’s going to repay me for a loss of a new 5 bedroom home. At the closing, the lady doing the closing said I did not need title insurance and the title insurance for the lender would cover anything that would go wrong; and it would be a waste of money, Why would she say this? I am a plumber, not a closing agent. I didn’t know any better at the time. I trusted her professionalism. I never received closing documents and, from what I was told, they have been lost, when I requested them since closing. I do have the closing agent’s closing instruction and unsigned closing documents left behind by their closing agent; and a contract of specific closing instructions from the lender to the agent, which stated to not close this loan nor disperse any escrow money unless all criteria was met. I have no deed, which is one of their instructions to have done or not close the loan… they did so any way. I also have called the title insurance company for a copy of a signed HUD-1 statement and they have stated that they do not have one.

  2. ha ha, the title company, American Land Title Company in Montana was the one who actually “materially altered my deed of trust” basically rendering it void after I had signed it and ‘closed’ and then they typewrote over it, changing my title to make it a commercial property and then filed it with the state! so much for trusting the title search.! what a bunch of crooks. They got caught, and have confessed to a majority of it but the lawsuit has taken over three years. alot of my lifetime. I would not be surprised to find the title companies have been conspiring with banks and appraisers, – they make billions a year and pay out less than 4% on claims. MAKE SURE you get some recommendations and one who you can trust.
    Mine continued to screw me by faxing fake deeds and non insurance policies, but just the ‘commitments to the bank’ -trying to cover up their
    crimes… all true.

  3. Mildred, I agree with your post and would extend your statement, “the title on almost any property mortgaged in the past 15 years is clouded IF it has been securitized” to also include: “the title on almost any property mortgaged in the past 15 years is clouded IF it has MERS named as mortgagee, which is perhaps 60 million (minimum) titles.” And the title insurance companies had to know it, but were happily in on the scheme from the beginning.

  4. Can a beneficiary override a trustee?

  5. One look at the MERSINC.org website under (ABOUT US) – shareholders [tab], the entire real estate collapse becomes ridiculously transparent. TITLE COMPANIES, BANKS, LENDERS, INSURERS,ALTA MBA,cornered the market while their silent partner (Wall Street), kept pimping funds to (Main Street). Why none of the shareholdes disclosed their ownership of MERS may not be important. Why borrowers were steered through MERS does not require a degree in (ROCKET SCIENCE). Now will the title company talk about a borrowers policy and clouded titles at the time of closing?

  6. I know one case – A homeowner shorted a house. She did not disclose that she did have some income from the judgment 6 digits and did not disclose the income to the servicer and her real estate agent. She used a title insurance company to close the short sales. And those two liens were lifted by the servicer using robo-signing authorities in an infamous middleman company. The signature was definitely electronically done so as the filing. After looking at the record of MERS, the house not only has the second lien active, but also there is some investor’s interest other than the servicer that lifted the lien…. The docs that are filed at the local county office was sent to the title insurance company…. So is this valid transaction? And who is liable for this mess?

  7. LOL… They even did not catch lis pendens twice after the owner changed. So what is the excuses for the title insurance company? What kind of database they look at? Obviously it was there at the county office….

  8. The title insurance risk is another aspect of this whole problem which is almost beyond belief, if you really understand it.

    Much of what is stated here has, as my 29 year son calls it, ‘some version of the truth’. The problem is that a ‘version’ clearly indicates it is not the whole truth and therein lies the problem.

    I agree with the poster who said if you don’t really know a subject as critical as this one, it would be a favor to everyone to avoid posting on such a broad platform.

    Now, to discuss a ‘version’ which is unfortunately a common one put out there by the title companies to make everyone feel a tad better. It is true that there is an owner’s policy designed to give a buyer future protection from a possible past problem. There is also the seller’s policy which is designed to provide them protection if they get called on the carpet about something which happened during the time they had the property in there name.

    Please don’t forget that these are bankster people we are dealing with. They did not start this little scam the people program last month or even last year. It has been going on, to my knowledge, for more than 15 years, at least as far back as the creation of MERS.

    The question was raised why are we seeing the king of documents which essentially warn that they have some serious restrictions on what they will cover? The answer is because of ALL the other things which have been uncovered/made public in the past 4 months: clouded titles. The whole robo-signers, lost notes, rushed foreclosures–ALL the rest of the crap which has been being done has been for two major purposes:
    a. the hide the fact that the titles were clouded with
    no way to fix them, no way to clearly re-establish a
    clear chain of title, and
    b. to cover the fact the the mortgage backed
    securities are, as someone so elegantly put it
    yesterday are ‘un-backed’.

    Lenders/Servicers/Banks only have properties in their name for a brief period of time prior to its sale as an REO if it is ever transferred into their name. MOre typically it is transferred into the name of the guarantor (HUD, Fannie, Freddie, etc). This allows them to avoid any liability for any extended period of time. To be completely off the hook they require ANYONE who is buying ANY REO in the country to sign a hold harmless disclosure which basically says” You assume all risk, for EVERYTHING including any title problems, we assume none.

    The consumer has a worthless piece of paper when they buy a title policy. Until maybe a year ago a few title companies would allow a buyer to go get their owner’s policy for an REO from an independent title company, not the title company representing the REO seller. Almost no title company in the country is willing to issue broad title coverage to the REO buyer since they know what the general public is just now learning: the title on almost any property mortgaged in the past 15 years is clouded IF it has been securitized.

    Suggest you read: “Title Crisis: Clouded at the Core” at http://www.4closurefraud.org.

    Nobody in their right mind needs to be purchasing a foreclosed property today without getting an ALTA comprehensive coverage policy which includes what is called ‘gap coverage’ giving protection for any ‘undisclosed or unrecording issues.

    I told you what you need. I didn’t tell you anybody was going to sell it to you.

    I teach title classes as well as numerous other foreclosure related courses and have for the past 6 years. I have been one of those folks trying to draw attention to the problems we are now facing as an instructor REALTORS, counselors and attorney across the country for more than 5 years. Since my message was out of sync with anything those audiences were hearing from other sources, especially banks and title companies they were impressed with my conviction and my delivery but were certain I had gotten it totally wrong.

    Unfortunately, I was absolutely right and many folks who have built a portfoli of REO properties for their retirement had better plan on holding them for a very long time, since they won’t be selling.

    And now would be an excellent time to start praying that the rightful owner doesn’t hear about the Ibanez ruling. Or the Class action lawsuit in Indiana aganst Bank of America for wrongful foreclosure or numerous others which either have or will be filed here shortly.

    REO has entered a whole new phase. Banks are going to start coming to the table and doing reasonable modifications in the near future. It is one of the easiest ways for them to get the title re-established and begin a NEW chain, starting with the modification.

    What a tangled web we web, when first we practice to deceive.

    I could go on and on but I have other writing to do tonite.

    Be forewarned.

  9. kac,

    Cannot tell everyone here — enough — that mortgage title fraud was at issue — and that prior loans (if refinance) WERE NOT paid off.

    Scenario — current lender places you in false default – just while you are REQUESTING refinance — insurance paid on falsely labeled default. New refinance implemented on false new origination. Mortgage title insurance is already dead. Stuck in default loan — for which never really exists. Never find true creditor. And, payoff check by subsequent refinance to prior lender is MISSING. — cannot verify as to where it should have gone.

    Nice little package. — but not for you.

  10. leapfrog,

    Thanks for the VA post —Everyone knows mortgage title fraud is big issue. They are just trying to baby-step to fix. Thanks again — for the alert!!

  11. funny, Stewart is the title insurer on my loan…they apparently did not do too much title research prior to closing it since after Countrywide/BOA refused to modify my loan, I did some research only to find there are two unreleased mortgages recorded at the registry of deeds, now in front of any Countrywide mortgage, if and when it ever is recorded, going on four years since closing! Yeah, they sure do a lot for the money those title insurers….

  12. Substitution of Trustee

    Stewart Title is original Trustor and MERS is beneficiary on the Deed of Trust.

    But MERS the beneficiary (found to be an employee for the servicer acting as assistant Vice President) substitutes for Power Default Services or Default Resolution Network both which are Fidelity National Title Company, plus the substitution occurs at the Notice of Default. What purpose or position does Stewart Title have as theTrustee on the Deed when MERS the beneficiary makes the sustitution?

  13. The problem with title insurance is this:

    You buy title insurance, and sure they find and fix problems beforehand. No problem with that.

    But the “insurance” should protect the borrower who bought the insurance and any lender he cares to engage. It doesn’t and if you refinance you find the same title insurance company standing at the ready to sell you a new policy, and the old one may be only 6 months old.

    If the “insurance” were only $80, that would be OK, but it’s up to $1400 and at that rate it should be persistent.

    This is the fraud with title insurance. Nobody is talking about this.

  14. @ Pelucheven: Are you aware of this? Action Alert for Virginia Residents!!!

    VA Attempts To Fix Fraudclosure – Banks Go Nuts

    They’re trying to kill this bill folks – get on the phones if you live in VA, and do it NOW

    http://market-ticker.org/akcs-www?post=177121

  15. dny

    Good point. There are many problems with insurance issues — tip of the iceberg.

  16. ANONYMOUS, Ian, give this a think:

    If the Lender’s Title Insurance Policy on a “MERS” loan names the “Lender” (not MERS) and the Title Agent knows that the “Lender” is NOT the “Lender,” then isn’t it a fraud to have required the borrower to pay for said policy, particularly in view of the fact that the “commission” paid to the title agent, very often also the “settlement agent,” was probably the sole payment that the title / settlement agent was getting for closing the “loan” for the “Lender?”

    No Title Insurance Policy that I’ve seen names “MERS” as insured, for obvious risk-aversion reasons on the part of title insuror. But the title risk exposure is either moot from inception, or dissappears immediately at the closing, because “MERS” was stated to be “mortgagee.”

  17. Mr. Johnston has a very good book about how title insurance works: “David Cay Johnston is the author of Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You With the Bill).”

    Ian, you have a good point but according to a previous post, title insurance is only good for the time period before and up to the closing. How can it “last” until the debt is repaid? In other words, if it is in place until the debt is repaid, why does it not help people in foreclosure? http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  18. in virginia the insurance bureau investigators are really tough, i am sending them copies of these issues and they are very intrigued.

  19. Neil

    Thanks for clarifying — yes, different many types of errors and omissions liability.

    Ian — you give me an important “clue” — as to issue — thanks.

  20. The problem these folks are going to have is that many homeowners are now recognizing that the bigger the title company, the bigger the insurance risk pool to fund their E&O payouts.

    Until a judge issues a title quieting the slanders caused by foreclosures and adverse claims from parties that can’t prove agency, the title companies put themselves at severe risk of being exposed to lawsuits.

    If we learned anything from Ibanez, it’s that bank attorneys have absolutely no idea how to address chain of title issues. The greed completely clouds their judgment when it comes to pleading cases. Their arrogance shows up in court when they attempt to change their original argument to something more convenient. Lessons to be learned here: A simple chain of title assessment done in advance would have prevented this problem and they would have researched their dilemma further to figure out a way around it.

    OLD CASE LAW: Titus v. Tolle … applies to chain of title issues and ejectment (detainer).

    http://www.cloudedtitles.com

  21. If a lender’s title policy lasts until the “debt” is repaid, who is watching for compliance?

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