Title Insurance Talk dianecipa@gmail.com

mortgage fraud rears its ugly head once again in an unexpected place

2012-05-15T10:06:00.000-04:00

We've been working on a refinance transaction for a number of weeks. The file has been stuck in mortgage underwriting because we reported a pending lawsuit and the borrower didn't know how to handle creating a letter of explanation or why one was needed.

So, last week, finally, the borrower's attorney provided an explanation which I thought was terrific and if I had been the mortgage underwriter, I'd have approved the mortgage.

Imagine my shock yesterday when the mortgage underwriter requested that I amend my title insurance commitment so it showed no pending lawsuit.

She said they had a guideline that says they will not approve a mortgage if the borrower has a pending lawsuit.

HUH? I know that sometimes mortgage underwriting rules defy logic but anyone could have a lawsuit filed against them without merit and was she telling me that these people cannot get mortgages? I have to believe that this is a misinterpretation of the rule, however, IF that is the rule, then so be it. This borrower has a pending lawsuit and if your guidelines say you cannot approve his mortgage, then deny the loan. Don't ask me to scrub the title commitment to show no pending lawsuit because that is MORTGAGE FRAUD and I will not go there.

As I had this conversation with the underwriter through emails and on the phone, I did suggest that I did not think this was her intention but that she needed to realize that this is really what she is proposing. I calmly asked that she review this with her supervisor and she said she would. I am awaiting their response and do hope that this is a rogue underwriter who needs more training and not the beginning of yet another round of mortgage lending gone bad.

Fingers crossed.

HousingWire presents: Memes | HousingWire

2012-05-14T10:24:00.001-04:00

HousingWire presents: Memes | HousingWire

buyer didn't want home warranty

2012-05-09T16:07:00.000-04:00

Last month we closed a transaction - conventional loan with a large down payment. On the HUD-1, pursuant to the sales contract, the seller paid for a home warranty. We remitted the fee to the home warranty company.

Today I received a call from the buyer who said he had contacted the home warranty company and cancelled it. They told him they would be sending our check back to us. He was calling me because he wanted that money. I told him I couldn't redirect the money to him. I would be refunding it to the seller.

He then explained that he never wanted the home warranty and had asked the real estate agent to change the contract and have the seller give him a credit for the fee. There was no seller assist in the contract so there wouldn't have been any problem, I think, getting approval from the lender to do this.

For some reason his agent told him to just take care of it outside of the closing. This is how people get into trouble. There is no way the consumers would know that doing things outside of closing isn't kosher.

note to Jerry who needs help with a title mark-up

2012-05-08T10:29:00.000-04:00

I couldn't hear your phone number clearly on the voice mail. Please call again or shoot me an email to dianecipa@gmail.com.

PA title insurance rates effective July 1, 2012

2012-05-06T16:44:00.002-04:00

http://www.oldrepublictitle.com/panational/Resources/PARatesEffective7.2012.pdf

Here's a question for notaries.

2012-05-05T22:11:00.000-04:00

If a seller, a spouse in a messy divorce, clearly states that they are signing the deed under duress, do you sign and seal the acknowledgment?

I say no.

What if this person is forced under duress to sign a separate document which says they are not signing the deed under duress? I know it sounds implausible but that's what one of our readers says happened to her.

How would you handle that situation?

adding labels to old posts

2012-05-05T10:01:00.001-04:00

I like this new blog format mainly because I think it is easier for you to find content of interest. I'll try to make that even easier. I'm slowly going back through posts and creating a more expansive label base. It will take a long time to get through all of the posts but I'll use the "swiss cheese" approach. Do a little bit at a time and eventually it will all be done. ;)

trying a new dynamic blog look and experimenting with the snapshot thingy

2012-05-04T12:43:00.002-04:00

Title Insurance Talk has a new look. Please let me know if you like it or not. The tool bar gives you different options for viewing posts. Pick the one you like. I have no idea what SNAPSHOT is or why it shows no posts. Will continue to experiment. ;)

Pennsylvania title insurance rates are changing.

2012-05-02T10:33:00.000-04:00

Effective July 1, 2012 you'll no longer see basic and reissue rates. Other rate categories have also been eliminated. We'll simply use SALE or NON-SALE rates. More info to follow.

Brian says, "what a mess"

2012-05-01T13:44:00.001-04:00

hello Diane..just found your blog....wonder if you could take a look at this mess....

1. Nov 2005 Refinanced a property through American Home Mortgage Acceptance

2. Closing Attorney mistakes: Deed of Gift was not signed by Guarantor

3. Date referenced on Note is 10NOV2005 which is not the Date on the Deed of Trust.

4. Deed of Trust: the recorded copy has a date of 12NOV2005, but the one I signed at closing has a date of 11NOV2005.

5. AHM files CH6 in AUG2007 and force places insurance and property taxes along with fees which causes monthly payment to triple (basically manufactures a default)

6. JAN2008 servicing rights sold to CountryWide (they begin foreclosing)

7. JUN2008 CW sends a "Modification" agreement to me while processing a Foreclosure sale (I sign it)

8. CW hires local Foreclosure firm that files a Quiet Title action before I sign the Modification....(the Firm realizes the Guarantor never signed the Deed of Gift/Warranty Deed)

9. BAC Home Loans/BOA now claims they own the Loan and the Servicing rights and want to Foreclose/Short Sale

Question:

1. Negotiated Solution: could BOA be put back into the position it paid off at the time of the Refinance? equitable subbrogation?

2. Does BOA have to prove that they own the Note? holder in due course etc...in order to be allowed a seat at the table?

3. Should a Counter Claim be filed to put AHM/CW/BOA on the defensive to have the "True" Chain of Title" proved prior to any negotiations?

would like to post on your blog....

thanks...Brian

Hi, Brian:

First, if I were in your position, I'd want an attorney giving me a hand. That said, there's much in your email that I cannot address, but perhaps we have a reader who will.

I can speak to a few items.

Bank of America is the owner of the mortgage by succession. They would not need to file an assignment of mortgage or prove ownership of the note. When Countrywide was failing, Bank of America stepped up to the plate. It was a well publicized event and a matter of public record. You can use a search engine to pull information if you'd like to read more about it.

I am curious about the quiet title action. These procedures require notice to the property owner giving you an opportunity to respond. I don't see this step as an end run around you but a matter of perfecting the lien position and it should not impact a pending modofication.

If Countrywide offered modification and you accepted and signed a document, I don't understand why it hasn't been filed of record or why BOA wouldn't honor it. Someone dropped the ball. You may get help on this item by contacting the Consumer Financial Protection Bureau. Go to their web site and submit a complaint concerning the modification.

I think it is important to keep the complaint simple. Too much information - at least at the beginning - could confuse someone at the mortgage servicing department of BOA and also at the CFPB. Focus on the pending modification.

So, to wrap up. This is a serious matter and so having legal advice is a good idea. If the modification is the answer to your problem, I'd concentrate on finding out where the ball was dropped and seek assistance to rectify that matter.

One more thing, certified mail is a good tool to get attention. It shows people you are serious and keeping a good record. Be sure to follow up all phone calls with a certified letter reviewing the status and moving the case forward. When sending such a letter to BOA, be certain you use the address for "qualified written requests". It's a special address and you can probably verify it with the state banking regulator or get it in writing from BOA.

Good luck!

Diane

hey the neighbor is digging up my yard!

2012-04-25T16:29:00.001-04:00

Hi Diane,

I ran across your blogspot while trying to research about my title insurance problem.

I bought my house in Sept 2009 my neigbor bought his house Apr 2010. When I purchased my house I was told and assumed we had a common driveway, because the begining of the driveway is completly on my neigbors property. A portion of the driveway in front of the neigbors house is on my property. There have been multiple surveys with no major disagreement other than an inch or two. It doesn't look like there is an easement for either of us to use each others property. The neighbor has been verbally abusive and taking pictures of us working in our yard. He even dug up a portion of our yard in front of his house (adverse posession) ? A week or so ago, he sent a letter via an attorney for us to stop trespassing on his property (the beginning of the driveway giving us access to garage and house). Now to my question. Should the title company have caught this? Can the title company say we negotiated an easement for you, take it or leave it? At this point, I do not want an easment, I would rather have my own driveway because my stress level will only continue due to the neighbor. Will the title company ask what I want or my opinion?

Thanks
R

Hi, R:

First and without delay, open a claim with your title insurance company. Go directly to the company on your policy and not to the agent who did your closing. They may or may not cover access to your driveway but it doesn't cost anything to get a response. Every state is a bit different in how they handle matters such as property line disputes. In PA it would likely not be covered but I understand that many other states include this type of coverage for owners and so the second part of your claim is the section of your land that the neighbor is trying to use. They may help you here.

When you look at your title insurance policy, look at the legal description of the property. If it included a clause that says "together with" and then talks about your driveway, there is a good chance that they have insured your use of the driveway.

You should also review Schedule B as this will show exceptions to your coverage.

I would not expect them to do anything about changing the driveway to one solely on your lot.

If title insurance does not cover the matter, then you'll need to hire an attorney to sort things out with your neighbor.

I guess the bottom line is that your best bet for help will be a property line dispute and unless you see the "together with" clause, you are unlikely to get help with the driveway.

Hope this helps. Good luck!

Diane

The HUD-1 was different!

2012-04-23T17:02:00.000-04:00

Hi Diane,

I found your blog while looking for an answer to a question about my own closing that took place in NJ two weeks ago.

I was given a copy of all the documents, including HUD-1, by the lender's attorney just before we began signing. Later on, I was reviewing the documents and I could not match the numbers. I contacted the attorney for the seller and obtained a photocopy of the signed HUD-1. The numbers on that signed form matched against the check that I wrote. But sure enough, the numbers were different from the copy of the HUD-1 that I received at the closing.

I am not alleging, nor suspecting any wrongdoing, but I would like to know what happened so I could get comfortable with the numbers. If there were at least two different HUD-1 forms, then I want to be sure the correct form was used. The difference is substantial, around $4,000.

Can you offer any advice, what should I do in this case?

Sincerely,

Hi, A:

It is not uncommon for a HUD-1 to change before and during closing. Sometimes there are last minute changes, however, every party should walk out of the closing with a fully executed final version.

It's possible that the attorney had clerical help making the copies and that person inadvertently included one of the earlier drafts.

If you are curious, you could pursue an explanation, but since the one you signed matches up then I have to presume it was the one reviewed at the table and the final version.

Hope this helps. ;)

Diane

What about those liens discovered after closing?

2012-04-23T16:48:00.002-04:00

Hi Diane,

I short sold my house in July 2011 and it was found in the County Tax Bill that the City had a Lien on the property for past due sanitary charges. I was not aware of the charges or lien. Chicago Title was used by the buyer for title search and they did not find any liens on the title either. Now the Title Company has paid the lien in full but are requesting me (Seller) to pay them the lien amount or they will use Attorney and collection and I will incur additional charges. I was always been told that if there are any liens found after the Close of Escrow it is the responsibility of the Title Insurance Company. Are they allowed per Law in the State of California to recover any amounts they paid for failing to find the lien prior to close of escrow. Please let me know what is your recommendation.

Thanks,

Anonymous

Hi, Anon:

From the perspective of the buyer who purchased the insurance, yes, the liens discovered post closing would be the responsibility of the title insurance company, however this insurance does not extend to the seller.

Even if you were unaware of the lien, the responsibility still rests with the owner of the real estate. If a foreclosure had taken place, depending on the laws of your state this lien may or may not have survived foreclosure. In Pennsylvania, the mortgage lender who foreclosed would have had to pay it.

So, in the short sale, only the mortgage lien was released. Any other liens, even if found after closing, stay attached to the real estate. For this reason, title companies insist upon warranty deeds and affidavits. In these documents you would have given a personal guaranty of title. It is the warranties in the deed and other affidavits you signed at closing would be the basis for legal action against you. If you did not sign any affidavits or give a warranty deed, you might have a defense. In either case, you may wish to talk with an attorney. Some times the size of the lien determines how much effort the title company wants to expend in collection. Having an attorney at your side does present a more formidable challenge.

Good luck and I wish you well.

Diane

affinity relationship?

2012-04-20T11:22:00.002-04:00

This kind of cracks me up.

First it was called controlled business.

Then the folks setting up referral nets didn't like the sound of that so that, so...

They changed the name to affiliated business.

Then the folks setting up referral nets didn't like the sound of that so that, so...

They started calling it joint ventures.

Then the folks setting up referral nets didn't like the sound of that so that, so...

Now they want to call it affinity relationships.

hmmmmm.......

"What's in a name? That which we call a rose
By any other name would smell as sweet."

"If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck."

Hey, it's still controlled business. ;)

query: what does cpl stand for in a title company

2012-04-19T11:15:00.002-04:00

CPL stands for Closing Protection Letter which is also known as a Closing Services Letter. This letter is an extension of title insurance over the written instructions given to the title agent or attorney and also over the monies being remitted on behalf of the party to whom the letter is issued.

Most mortgage lenders require a CPL or CSL. The form varies by state with some allowing the title underwriter to issue one per lender and some requiring that the letter be case specific.

In Pennsylvania there is a $75 charge for the issuance of a Closing Services Letter. The CSL is case specific and is covers both the mortgage lender and the homebuyer.

open your mail! ;)

2012-04-18T16:22:00.000-04:00

This is a shot in the dark, however, any information would be helpful. I have a fairly confusing situation. I refinanced my home in 2007. When we originally bought our home in 2000 it was listed as 2 parcels. 2 years later we went through the proper process of obtaining a building permit to put a manufactured home on the 'empty' parcel for my father-this was signed off through the county. Little did we know that their had been a financial segregation (FS) put into place by previous owners, this was supposed to have been 'lifted' at the time of sale but was not, in addition the county should not have allowed a building to be placed on the FS parcel. My original lender routinely paid the taxes for both parcels per my request without any questions asked. When I refinanced in 2007 I asked for the same convenience of having my taxes and insurance paid with my P&I payment. It was recently brought to my attention that my new lender had not been paying on the taxes for the 'other' parcel. It appears that there was a mix-up in the legal description; the lenders legal description does not encumber both parcels, however, the county legal description does encumber both parcels. In order to avoid foreclosure on the property the lender paid the back taxes and gave me 1 year to pay them back, raising my mortgage payment another $1400. This has proven to be a financial hardship. In discussion with my mortgage company somebody had suggested that I file a claim with the title company. I did contact the title company and they are saying that they have documentation by the lender requesting that the 'other' parcel be removed from the deed of trust. I am confused as to who is responsible for this mess. The lender, the title company or both? I apologize for the lengthy question. There are many factors that further complicate this situation such as the county not having lifted the original financial segregation and the fact that I chose not to open my tax statements assuming that they were getting paid along with my parcel/home taxes until it was too late.

Regards,

T.

Morning, T:

I'm not sure about the FS because we don't have that in PA, however, on the issue of the taxes and encumbering the second lot, I can comment.

Lenders do not pay taxes on land that they have not mortgaged and so the current lender cannot be faulted for not not paying them for you.

There may have been some reason why the lender did not want the second lot in their mortgage. We don't know, but the real problem in all of this is just basic communication and taking the time to read documents you sign.

Presuming there were no written [pre-closing] disclosures that described the land or the tax figures, there were at least two documents presented at closing that, if read, would have alerted you. The mortgage document contained a description of the land. The initial escrow statement gave you tax figures.

In a refinance transaction, the title company is insuring the lender and they are taking their instructions from the lender. There is a presumption that you and the lender are on the same page. A good title agent will keep their eyes and ears open for possible misunderstandings and help the lender and consumer resolve potential errors, however, this is a courtesy and good service and not part of the insurance. I don't see a title insurance claim here.

If you've not read the book or seen the movie, I recommend looking for The House of Sand and Fog. It's about a title insurance claim and based on a true story in which the homeowner neglected to read her mail.

Humans can have misunderstandings and consumers have an obligation to read over documents or risk being legally bound in an unexpected circumstance. This seems to be a hard lesson learned. I wish you well.

Diane

query: how is wealth used in mortgage underwriting

2012-04-13T13:34:00.001-04:00

If a mortgage borrower has a high net worth, the underwriter may be slightly more lenient because of having reserves upon which to fall back on if you get in trouble. Otherwise, it doesn't play a role. Wealthy people get into financial pickles as often as those with little.

Wow...that's so 1978! Didn't they know you have to ignore pregnancy?

2012-04-05T15:38:00.000-04:00

The settlement agreement signed by Nashville, Tenn.-based Magna Bank requires the bank to pay one woman $14,085 for allegedly requiring her to return to work before her loan application was approved.

Irvine, Calif.-based Home Loan Center agreed to pay a Las Vegas woman $15,000 for denying her application to refinance her mortgage because she was on maternity leave.

When you refinance, why do you have to pay for title insurance and closing services all over again?

2012-04-05T10:58:00.000-04:00

I just had a chat with one of our pending refinance consumers. He wanted to know why he was paying for title insurance again. I explained that his owner policy wasn't being rewritten but the loan policy was.

He asked, well doesn't the loan policy just tell the lender that he is the legal owner of the property? I said, no, the loan policy tells the mortgage lender that their mortgage is in first position. What we do, then when we examine title for a refinance is to confirm ownership and then check for intervening liens and unfiled liens.

He wondered if that wasn't just a 20 minute visit to the courthouse. I said know that it also involved checking with sources outside of the courthouse, including municipal authorities.

For folks who are not in this business, it appears that we don't do much in a refinance transaction but the reality is that we have to do almost all of the work we did in the purchase transaction. We still have to set up the file, order title and lien letters, examine title, create the title commitment and policy, create the HUD-1, perform and coordinate the closing which normally takes place in the consumer's home. Then, of course, we do the post closing work of remittances and document storage. That takes resources and several people - all of whom must be paid.

Think of it like a roof. The first person, the builder, created the roof. When a new roof is needed some years later, the next person doesn't have to redo everything but they do replace almost everything and so you have to pay for materials and labor even though there is already a roof structure on the house.

In Pennsylvania, since we have filed title insurance rates, there are special discounts for consumers in a refinance. For this consumer's case, the title services would have been about $1800 is we were charging the basic rate. With the refinance discount, the title services will only be around $1300. I pointed out that the lender had given a conservative quote on the Good Faith Estimate of $1800 and so our fees were already worked into the refinance game plan.

The explanation did seem to help our refinance consumer and I hope it has also helped you. ;)

query via email: discharged debt with an underlying lien survives bankrupty

2012-03-28T21:30:00.001-04:00

I'm one of the many thousands of Americans who have been hit hard by the economic hard times and have been forced to short sale my home. Long story short....

I have a buyer who is an investor. He started working on the house before it closed and now has $15k invested into rehabing the house and we have hit a snag in the closing process.

A "lien" was found on the property that should have been found back when the house was refi'd. On my HUD Settlement Statement it shows I paid for a title search and it shows a charge for title insurance as well.

This lien holder was a secured loan taken out back in late 2004 to consolidate my medical bills. I eventually filed a Chapter 13 Wager-Earner plan and this account was included in the bankruptcy. It was reported to the credit bureaus the account has been closed, and shows a zero balance as paid through the bankruptcy which was discharged in 2007. My bankruptcy was discharged and paid off, along with a grant program I used to make home improvements and THAT lien WAS found and paid off, along with the bankruptcy when I refinanced the property.

When I refi'd the property, the original mortgage company was [redacted by dc]. They sold the loan to [redacted by dc] who subsequently was taken over by [redacted by dc]. I refi'd the property in 2007 to pay everyone off in my bankruptcy at 100% and was discharged after doing so. Keep in mind, this company has been reporting to the credit bureaus this account has been closed, has a zero balance AND was paid off through the bankruptcy. I even have a letter from this company's attorney stating the account has been closed and was discharged through the bankruptcy.

In trying to close this deal, the current title company performed a title search and FOUND this lien which should have been found and paid off in 2007 when I refi'd. They are refusing to remove the lien and are NOW in the first position ahead of [redacted by dc] and are stopping this short sale from going through. It's some little hole in the wall finance company and are extremely incooperative.

I called my attorney and he states the title company who handled the refinance are responsible for this. We have to place a claim with the title insurance company because it was the title company's mistake for missing the lien. As a result, my house may now foreclose and it will be put on my credit report as such.

The investor, shame on him, is upset with ME because I won't call this little finance company who SAYS they've been accruing interest all these years on an account that is reported to the credit agencies as closed AND their own attorney says has been closed. He wants ME to call them and negotiate a settlement amount and acknowledge I still owe them money just so the lien will be released and he can close on the house. My attorney has said I'm not responsible AND if HE wants to purchase the house HE should call them and negotiate a lower price to cover what is owed to get it released and close on the house. My attorney says it's his own fault he has invested money in a property he didn't even own yet.

Nevertheless, how do we find the title insurance company and underwriter to file the claim when the title company who closed on my refi deal has closed up and gone out of business to file a claim?

Any assistance would be greatly appreciated....

Wow. This is a dilemma. Let me divide the matter into two issues.

First, the buyer's problem is that he decided to work on a property BEFORE he owned it and BEFORE it was clearly proven that the title was clear. I know you understand that I am not offering legal advice on this because I'm not an attorney but your attorney is correct that the BUYER created his own problem and unless you also made some kind of agreement to reimburse him for his imprudence, then I wouldn't worry about it. Set that aside and concentrate on the other problem which is to clear the title to your house.

You have the second matter which is one we often find after bankruptcy - a discharged debt with an underlying lien or judgment which survives the bankruptcy, It is my personal opinion that bankruptcy attorneys who fail to provide the extra step of asking the court to vacate the lien are doing a disservice to their clients. When I have raised this matter with these attorneys they either know the lien will survive and don't care or they were ignorant of the law.

Your situation is compounded by the fact that the title agent who vetted your property in the refinance either missed the lien or didn't understand that it survived the bankruptcy.

So, the truth is that two providers whose services you paid for allowed a lien to stay attached to your house and the reality is that the refinance title insurance was a loan policy and will offer no direct source of help and you need to fix this one yourself.

That is the heart and truth of the situation. You would have had to deal with it at the time of the refinance if it had been discovered so this is just a delayed resolution.

As with any foreclosure, the lienholders expect to lose money and it is in their interest to make a short sale deal unless there is so much equity in the house to cover the foreclosure losses when the house is eventually sold after they go through all of the trouble - take it and then market it. This will help you but you must also keep in mind that the title insurance you bought in the refinance insured your MORTGAGE lender that they have FIRST position. This means that if you default and they have to move forward and foreclose, they will have to process a title insurance claim to deal with the finance company and get them out of first position.

The starting point moving forward is to acknowledge you are alone - no help from the old bankruptcy attorney or the title insurance company who insured the refinance. Your job is to find a negotiated settlement for both lienholders and your buyer. Hopefully they will all be motivated to mitigate damages and the deal you are offering is better than going through the title insurance claim process followed by foreclosure.

I am not saying this is easy but if the reality is that avoiding foreclosure or in the case of the finance company getting money now rather than later is the preferable alternative then you should be able to make a deal.

Either you or your attorney need to use good negotiating skills to pull it all together. If not, then everybody except the finance company loses.

I am sorry that I don't have better news but sometimes I think just clearly seeing the hand you are dealt does help. Now you just have to play it and I do hope you win.

Your attorney sounds like a good one. ;)

Diane

prior owner continued to use an open line of credit

2012-03-26T13:42:00.001-04:00

This is the title claim we title agents are trained to avoid. We take the extra step to freeze the line, if possible. We have the seller sign a statement requesting that the line be closed and satisfied of record. This is what we are supposed to do. Yet, when we recently processed a refinance title insurance application, we were shocked to uncover a situation in which a prior owner [TWO owners back] was using a line of credit attached to our consumer's house. How could this happen?

We started our investigation by contacting the bank and asking them to satisfy the mortgage. That's when we found out that the line had a balance and was still in use. WHAT? The bank refused to satisfy or assist us beyond a courtesy call to the borrowers asking that they call us.

We then made contact with the title agent who handled the sale that included the supposed payoff of the mortgage. This title agent is the one who SHREDDED her files and so we had no evidence to show the bank that they should have closed the line and satisfied the mortgage. [Two ex-employees of the SHREDDER did offer some help by somehow getting into the computer system and reprinting documents so we had a clue about the contents of the HUD-1 and the policy.]

Next we made contact with the title agency who handled the next sale, the one where our consumer was the purchaser. We asked if they had discovered the unsatisfied mortgage and they said yes, however, they did not pursue satisfaction. They requested and obtained an indemnification letter from the prior title company.

So, we had the first agency who may not have followed good standards and asked for satisfaction. Our clue that they may not have followed good standards is that they SHREDDED their files.

We have the next agency in line who also, in my opinion, didn't do such a good job. If they had contacted the bank they would have discovered that the line of credit was still in use. They also seemed to have insured over this unsatisfied mortgage without even disclosing its existence to their consumer.

We obtained a copy of our consumer's owner policy and then contacted BOTH title companies and had our consumer open a claim.

We got a great response from the claims department at First American. The attorney from the other title company was no help except that he wanted us to take an indemnification letter. We wanted more than that and First American sent demand letters to the prior owner and the bank. They offered and we accepted indemnification with PERFORMANCE language. Our consumer and lender were both on board and okay with this performance based indemnity as was my underwriter. We closed this transaction this week and the good news is that First American was able to get a release from the bank prior to our closing - much sooner than expected. ;)

query: what does it mean to show a jr lien as an exception on a Title Policy

2012-03-21T14:34:00.001-04:00

Normally a junior lien or subordinate lien would be shown on the ALTA loan policy in a special section dedicated to subordinate liens, however, if you need to show it as an exception, just add it to exceptions in Schedule B.

The title insurance underwriter should be able to assist you in the proper creation of the policy.

Wow....two big cheers in one day!!!! What's going on? Is sanity breaking out everywhere?

2012-03-20T15:45:00.001-04:00

“In the past three years HUD and FHA have been busy tracking and taking action against FHA lenders that violated underwriting guidelines but with those cases beginning to ease up regulators are expected to turn to RESPA and affiliated business arrangements,” the article says.

Read more in Reverse Mortgage Daily.

query: I have subdivided the property i have a Line of Credit against. what now

2012-03-20T13:40:00.002-04:00

You need to get approval from your lender before you sell any portion of that property. What you need is called a PARTIAL RELEASE. This will remove the mortgage lien from the part you sell.

can you hear me shouting and cheering...finally some logic!!!!!

2012-03-20T13:13:00.001-04:00

The Illinois Department of Financial and Professional Regulation, Division of Financial Institutions said it has received inquiries concerning the practice of some title insurance companies and title insurance agents providing title searches without charging for those services if the transaction fails to close, and asking if such offerings are akin to illegal inducements.

Responding to the inquiries, the regulators released a statement titled, “Statement Regarding Free Title Search Services as Illegal Inducements” in which it opined that agents who do such work for free are putting themselves in jeopardy of being found to be providing an illegal inducement.