Hoping Canadians are Stupid, Stewart Title Skips Warranties of Title


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I’ve been telling Canadians that there is considerable doubt as to whether the investment properties they are buying in the context of foreclosure are going to work out for them because of title defects. Some of them are listening and most see the deals as too good to be true. They are right — it is too good to be true, which means it isn’t true that the prices and title are just find, eh?

Here is the new disclaimer (see below). If you can find anything that protects anyone other than the title company then you are able to drill down further than we can. This disclaimer shows what we have been saying — the very use of the term “virtual” title tells us that there is no basis upon which the title agent or carrier will be held accountable or will pay anything if you buy property and take a policy from any of the major carriers.

Up until now it was standard practice in the industry that lawyers and lay people would rely upon the title report issued by the title company. Now they say it is for general information and you can’t rely on it. This means that virtually every buyer should have an attorney who is competent and has the resources to obtain and independent title report and is able to advise people holding or intending to hold title, mortgage or anything else. This gives them a license to insert or delete almost anything. The only way you can really know your chain of title is to go down to the county recorder’s office and examine the chain, one instrument at a time and to check for cross references where a parcel number or name might have been transposed.

What this also means is that anyone seeking to foreclose now must go through the same process and prove to the judge with a certified copy of the title registry that the mortgage is on there and that no satisfaction or other impediments to foreclosure are present. This is a new development and it therefore calls for new tactics and strategies.

Virtual Underwriter® is an underwriting tool. Stewart Title Guaranty Company and its affiliated underwriters (collectively “Stewart”) does not guarantee the accuracy, adequacy, or completeness of any content of Virtual Underwriter®, and you may not rely upon any such content. Only Stewart Issuing Offices may rely on Virtual Underwriter and only to issue Stewart insurance forms. Stewart makes no express or implied warranties with regard to Virtual Underwriter® and shall have no liability for any errors or omissions or for the results of the use of such material. You should not assume that Virtual Underwriter® is error-free or that it will be suitable for the particular purpose that you have in mind. Any material, forms, documents, policies, endorsements, annotations, notations, interpretations, or constructions included in Virtual Underwriter® are made available as a convenience only and should not be considered as altering or modifying the text of any matter to which they relate. Virtual Underwriter® should not be relied upon as a basis for interpreting the forms contained herein. Virtual Underwriter® is made available with the understanding that Stewart is not engaged in rendering legal, accounting, or other professional advice or services. If legal advice or services or other expert assistance is required, the services of a competent professional person should be sought. The material contained in Virtual Underwriter® is not a substitute for the advice of an attorney or other professional person. Preparation/facilitation of documents other than by an attorney may constitute the unauthorized practice of law.

see vubulletins.jsp?displaykey=BL133368894600000002


20 Responses

  1. If I were a Canadian and had bought a foreclosed property and relied on Stewart Title to issue “true” title insurance and they duped me with the bag of tripe nonsense ~ I would locate EVERY SINGLE person that has invested as such by running an ad in the local paper for several weeks and then contact Stewart and explain that you will siring ALL their dirty laundry VIA FULL PAGE AD if they do not retract the faulty policy and re-issue a REAL Title policy or give me a FULL REFUND for the bogus policy and then see where the chips may fall. If all else fails, look out CLASS ACTION!!

  2. Take a look at Stewart Title in regard to Oklahoma foreclosures. There the Supreme Court just handed down eight decisions THIS YEAR (one now published), requiring the original note and the note’s history leading to the plaintiff–IN HAND–BEFORE filing suit. The eight suits are listed at Stewart Title at the link below. The concurring decisions are excellent, and that’s good news for Oklahomans.

    This is from Stewart Title:

    Underwriting Guidelines for Insuring Oklahoma Foreclosures:

    1. Foreclosure Case in Progress:

    When the title examiner encounters a foreclosure case that is in progress and the Plaintiff has failed to demonstrate, at the time of filing of the Petition, that it is the proper party in interest, that it has possession of the promissory note either by being a holder or a nonholder in possession who has the rights of a holder, and that it has the right to enforce the promissory note, the examiner should make a requirement that the current foreclosure case be dismissed without prejudice to refilling; that a new Petition be filed in the name of the proper party in interest, with a copy of the note attached thereto along with proper supporting documentation showing the history of the note, and that an Assignment of Mortgage be recorded from the original lender to the foreclosing lender prior to the filing of the Petition.


  3. @Carie,

    I picked it up on Matt Weidner’s blog but it’s all the same: they ain’t doing too well…

  4. http://www.huffingtonpost.com/2012/04/20/housing-market-recovery-gwinnett-county_n_1438687.html?ref=business&ref=business

    “What in the world are people going to do?” McGregor asked. “Everyone has lost their equity.”

    That includes McGregor and her husband, who lost their home in New Hampshire to foreclosure, and are in danger of losing this one, too.

    They bought at the top of the market, in 2005 for $415,000, and invested $125,000 in improvements. Each month McGregor checks Zillow, the real estate website, and sees her house’s estimated value dip lower and lower. Most recently, the value was pegged at $220,000.

    Like thousands of other borrowers, McGregor thinks the note to her mortgage was not properly assigned, and therefore believes her servicer, Bank of America, doesn’t have the legal right to foreclose.

    Though deep in default, McGregor said she would simply not accept a short sale on her home. “Hell no, its my house,” she said. “And then go find what? Moving costs a fortune. I’m going to stay and fight for as long as I can. This is a front line.”

  5. And if that letter is a hoax, forward it right away! That may force the start of the complete remodeling…!

  6. Did you guys read that Moynihan letter I posted? Did you see that? If you know A-NY-ONEwho is currently paying A-NY-THING to B of A, now is the time to forward it and tell them: “Quit paying”.

    People, QUIT PAYING. They are under complerte remodeling!!!

  7. Canadians aren’t stupid , they are however exceedingly cheap .. if they are buying US property they are relying on “professionals” here that aren’t working in their best interests.

  8. Seems this government will dismiss a few secret service men for a prostitution scandal but will not jail the bankster for molesting the tens of millions of home owners who were finacailly harmed. Bet the hooker got her $ 800 bucks and the home owner and thier kids are sleeping in the streets.

  9. Being upside down on your house is nothing but larceny granted by the US Government ! Jail DeMarco ! and his other buddies who work within Fannie and Freddie.

  10. This is a real scream!


    Dear Fellow American,

    Welcome to your Bank of America.

    (Insert here Moynihan’s picture)

    Today, it’s time to acknowledge that our Bank isn’t working anymore—not just for the market, but for people, our real customers. We’ve paid $8.58 billion in relief to borrowers and $3.24 billion in fines. We face lawsuits and claims from citizens, companies, and state and local governments. There is even a petition with the Federal Reserve to break up our bank, adding yet more uncertainty to our position. Finally, we’ve found ourselves front-and-center in the national foreclosure crisis, and deep in unpopular investments like coal, at a time when climate change is a growing societal concern.

    As a result, our company’s shares have fallen precipitously, and now trade at one-fifth their 2008 price. Our Bank may, in fact, soon need help keeping afloat—and much as in 2008, you, the American taxpayer, will be asked to provide that assistance.

    The institutions you rescued in 2008 have continued much as they always were, engaging in the same practices that brought our economy so close to collapse. To make sure that this time around, things turn out differently, we at Bank of America are launching a forum in which you, the American taxpayer, can prepare for the time that you own us. By sharing ideas, and reading and rating the ideas of others, you can begin charting a course for this Bank—your course.

    And when the day comes that you, the American taxpayer, own this Bank, you will be ready to make it a Bank for America—one that brings benefits not to the privileged only, but to all of our customers, and to all of our stakeholders too.

    Welcome to your Bank of America.

    Brian T. Moynihan
    Chief Executive Officer

  11. No, I never personally communicated with cubed2k…I don’t feel in my gut that the Modesto thing was him, though…at least I hope not.

  12. @Carie,

    As you may have read in other posts, a few of us are very concerned that the SWAT incident in Modesto, CA, may have involved cubed2k. Didn’t you correspond with him at some point? If yes, have you heard from him or can you contact him to see that he’s alright?

    If it’s him, we need to find out and acknowledge what people are going through. Even use him as a serious example of what is happening to this country and start move hell.

    If it’s not, we’ll still make a difference by letting him know that we do care for each other. Either way, it would be a good thing. It’s getting awfully close.

  13. As Forrest Gump would say, “corrupt is as corrupt does!”

  14. “We have an adversary system,” said New York State Supreme court Judge Arthur Schack, who has rendered harsh opinions and sanctions for improper and fraudulent foreclosure documents. “So if someone doesn’t challenge it, it’s going to go through.”

    Couldn’t have said it better myself. We have a legal system in which you need to be a squeaky wheel. You’ve got to fight. You’ve got to go to court. It is the intimidation game.

    In fact, it is because of that system that bullying (which hardly exists anywhere else except in places like Congo and Guinea) is so prevalent in the US. Kids learn from example.

  15. @Jan,

    I agree. In fact, most people would qualify as “stupid” by Neil’s definition. We, Americans, were as “stupid” as Canadians when we got sold bills of goods. I truly believe that, naturally, people do not have in them to be deceitful, conniving, greedy, selfish and naturally, people do know what the minimum required is to preserve their species.

    If we are 99% v. 1%, there is a good reason: the 1% are the conniving bastards, intent on destroying. The rest is the stupid ones… I’m in good company. I think I’ll remain stupid for a while.

    You never know about that hell thing…

  16. http://economywatch.msnbc.msn.com/_news/2012/04/19/11269115-inside-the-foreclosure-factory-theyre-working-overtime?lite?ocid=twitter

    Inside the foreclosure factory, they’re working overtime

    “…Lenders claim that wrongful foreclosures based on paperwork errors are exceedingly rare. But unless that paperwork is challenged in court, there is no way a borrower would know a mistake had been made, or whether the lender had even proved it owned the loan and had the right to foreclose. Half the states use “non-judicial” foreclosure procedures, in which home seizures are subject to limited or no review by a judge.
    “We have an adversary system,” said New York State Supreme court Judge Arthur Schack, who has rendered harsh opinions and sanctions for improper and fraudulent foreclosure documents. “So if someone doesn’t challenge it, it’s going to go through.”

    “…But lenders’ disregard for the law is still rampant, according to consumer advocates and regulators. Lawyers defending homeowners against foreclosure say the process in some states has been so corrupted that faulty and fraudulent documents have become commonplace.

    In February, the National Consumer Law Center surveyed some 260 consumer attorneys in 45 states, who reported that thousands of homeowners were improperly foreclosed on in just the past year. In four out of five cases, the attorneys reported, lenders failed to properly credit payments or they wrongly claimed homeowners owed bogus fees.
    In February, an audit by the San Francisco assessor’s office of 382 foreclosure cases over the past three years found “one or more irregularities” in 99 percent of the loans and “what appear to be one or more clear violations of law” in 84 percent of the loans…

    “…The Wells Fargo legal process specialist said she has not been called once to testify in court to the accuracy of her work in the past six months. Court appearances by her co-workers are a rare event, she said.
    Asked if she could she explain to a judge how she had obtained personal “knowledge, information and belief” that the documents she prepares are accurate, she said, “I wouldn’t even feel comfortable answering that question.”


  17. It is not that Canadians are “stupid,” it is that they are naive. The “buyers” are typically Quebeckers who like to escape the harsh winters of Montreal and flock down to Florida for the winter season. They are not familiar with the outrageous frauds being perpetrated by US Banks acting as “servicers” yet pretending to own notes and mortgages. So they are being sucked into the vortex, swept down into the Black Hole of financial destruction perpetrated by that handful of New Yorkers that all belong in jail.

    Besides, in the context of Florida, they are the only buyers out there with any money left. Soon, they too will be separated from their cash and their real estate.

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