News By Edition

Municipalities and other local governments are announcing their desire to use eminent domain to revise existing mortgages for underwater borrowers and people are becoming concerned.

The National Association of Insurance Commissioners’ (NAIC) Title Insurance Task Force continued to work through its agenda over the summer, coming together at the NAIC Summer Meeting in Atlanta in early August to address the progress that has been made on each item, decide on the tasks for the upcoming year, as well as discuss the information that will affect the regulators and the industry they regulate.

The Massachusetts Supreme Judicial Court shook the real estate industry in the state after making a series of potentially troubling decisions in the wake of the foreclosure crisis. To address the issues that remained after the court’s decision, the Massachusetts legislature worked quickly to adopt a new law to provide clarity to the real estate market and address disquieting foreclosure practices. Read on for more details.

Following its reversal in Benavides v. Chicago Title based on similar issues, the 5th U.S. Circuit Court of Appeals reversed a Texas district court’s grant of class certification in a reissue rate case against another national underwriter. Read on for the details.

Two co-conspirators in a mortgage fraud ring that schemed $9 million from lenders and involved 200 properties were each sentenced for their roles in the scheme. Read on for more details.

The Colorado Real Estate Commission revised its position statement to clarify its desire that, among other things, consumers select settlement service providers. Read on for more details.

A month after the Consumer Financial Protection Bureau unveiled proposed forms and rules integrating the mortgage disclosures required under RESPA and the Truth in Lending Act, it has received more than 300 comments. Read on to find out what they are hearing.

A California homeowner who had resolved issues surrounding a sewer line that ran through his property by reaching a settlement with his title insurer tried to get the insurer to indemnify him against a suit his neighbor brought against him regarding the sewer line. Read on to find out why the title company denied the claim and why the case went to a California appellate court.

With municipalities and other local governments announcing their desire to use eminent domain to revise existing mortgages for underwater borrowers, the Federal Housing Finance Agency voiced concerns about how this plan could impact American taxpayers and access to mortgages for potential homebuyers. Read on for the details.

A former Chicago Title vice president has arrived at New York-based Bousquet Holstein PLLC, formerly Green & Seifter, Attorneys, PLLC. Read on for more details.

The U.S. District Court for the District of New Jersey approved a motion for reconsideration regarding its decision to deny motions for summary judgment by both a warehouse lender and its title insurers stemming from a fraudulent scheme involving 220 mortgages the lender funded. Read on for more details.

Dr. Therese Vaughan announced she will step down as chief executive officer of the National Association of Insurance Commissioners during the first quarter of 2013. She has been active in the organization for many years, having served as president while Iowa insurance commissioner before taking her current post in 2009.

Ten New Jersey residents were indicted for their alleged roles in a $40 million mortgage fraud scheme that used phony documents and straw buyers to make profits on overbuilt condos at the Jersey Shore and resort destinations in South Carolina and Georgia, N.J. Read on for details.

When refinancing her property, a homeowner in New York found that Home Heating Oil Corp. had obtained a UCC-1 fixture filing against her property to cover debt owed by the previous owner. After the title insurer denied coverage because the fixture was not part of the property, a trial court in New York had to determine whether such a lien was actually covered. Read on for the court’s decision.

The U.S. District Court for the District of Massachusetts found a national title insurer liable for a negligent title search that was done by its agent. The insured sued the title insurer after discovering he had been sold fictitious condominiums as part of a Ponzi scheme. Read on to find out the court’s reasoning.

In a second attempt to certify a class of Washington state homeowners who had allegedly been overcharged for title insurance during a refinance transaction, a couple once again fell short of providing the needed information to prove to the court that they can efficiently and reliably identify class members.

Seven Lansing, Mich., area residents were indicted for their alleged roles in an equity stripping scheme involving approximately 35 homes. Read on for more details.

While the SEC has been busy since the inception of its new whistleblower rule, the CFPB has also created a whistleblower program that affects every company that is a covered entity under the new agency. What are the CFPB’s new whistleblower provisions, what potential threats do they pose to your company and what steps should you be taking now to avoid trouble down the road?

According to Interthinx’ Mortgage Fraud Risk Report for the second quarter of 2012, overall risk continued to climb, with sharp increases in certain metropolitan statistical areas, including MSAs in Georgia, New York and Tennessee. Read on for details.

Entrust Solutions, a title servicing company, expanded its footprint in Georgia by adding a former Southern Title account executive as Georgia state counsel. Read on for details.

During a hearing about the impact of Consumer Financial Protection Bureau regulations on small businesses, Director Richard Cordray assured members of the U.S. House Committee on Small Business that the small business panels required under the Dodd-Frank Wall Street Reform and Consumer Protection Act have proved valuable. Read on to find out what he had to say about the panel’s influence on the proposed combined disclosure rules.

Missouri Attorney General Chris Koster and Lender Processing Services Inc. have reached a settlement of criminal proceedings against LPS’ subsidiary DOCX. Read on for the details.

Two mortgage industry veterans have teamed up to launch a new venture designed to represent industry interests in legislative and regulatory venues.

The former Berks County, Pa., recorder of deeds was indicted for allegedly defrauding the county of tens of thousands of dollars in fees owed to the county. Read on for details.

The U.S. District Court for the District of Minnesota broke down the parties’ arguments in determining what duties a title insurer had to a lender who had discovered it was a victim of a real estate investment scam. Read on for the court’s determination.

California adopted legislation that will, among other things, increase the fee for recording real estate instruments, as well as expanding the definition of those instruments. Read on for details.

A national underwriter went after the co-conspirator of one of its agents, seeking the money the conspirator received from the agent’s escrow account. Read on to find out how the U.S. magistrate ruled in the case.

Two attorneys in a Brooklyn law firm were convicted of participating in a mortgage fraud scheme that resulted in more than 425 million in fraudulently-obtained loans from several large banks, including Countrywide, IndyMac and Wells Fargo. Read on for more details.

First American Title Insurance Co. announced the appointment of a new Florida state counsel and vice president. Read on to find out more about the new vice president.

Alaska is beginning to electronically record real estate documents, starting with the Anchorage District Recorder’s Office. Other recording districts will follow in the next several months. Read on for more details.

A purchaser and seller hammered out an unrecorded purchase agreement, unaware of a judgment lien placed on the property. The title company who insured the transaction didn’t identify the lien, but paid off the most senior lien, a construction loan. When the issue of who had priority came before a trial court in Illinois, the trial court sided with the judgment lien holder, saying the title company should be the real party in interest because it was providing the defense because of its mistake in not identif

A man who loaned his long-time friend money misinformed a title insurer about the facts of the loan when he submitted a mortgage and note to the title insurer to get a lender’s policy on property his friend’s company owned. He later sued the title company seeking reimbursement for lost funds after an unknown tenant on the property received quiet title. Read on to find out what happened when the case went to the appellate court in New Jersey.

The Consumer Financial Protection Bureau released its semi-annual report, describing the bureau’s work in the first half of 2012. Read on for more on what the CFPB has done this year.

Two Chicago lawyers and their codefendants were sentenced to federal prison terms following their convictions for participation in a mortgage fraud scheme involving at least 40 residential properties. Read on for more details.

A Jacksonville, Fla., title agent was sentenced to time in prison for closing fraudulent loans as part of a larger mortgage fraud scheme. Read on for the details.

The First Judicial District Court for the County of Santa Fe, N.M., issued an order for declaratory judgment and permanent injunctive relief against Mimbres Valley Escrow Services Inc. Read on for more details.

An Oregon bank sued its title insurer for breach of policy for losses incurred in a post-foreclosure sale. The problems arose from a previous foreclosure on a line of credit tied to the same property, in which the title insurer defended the bank’s position, but did not reconvey the trust deed to the first property. Read on for details.

Twenty people in Puerto Rico were charged with making false statements in loan applications, aggravated identity theft and money laundering, all with the purpose of defrauding the Federal Housing Administration into insuring mortgage loans. Read on for details.

In a case where the owner of a mall couldn’t sell the property due to a restriction of land use the owner believed was covered by an ALTA 9 endorsement, the 3rd U.S. Circuit Court of Appeals had to determine whether the scope of coverage under the endorsement’s provisions encompasses losses resulting from entire instruments, or coverage is limited to losses caused by the particular, listed encumbrances. Read on for the court’s decision.

A homeowner in San Diego, Calif., sued a holding company and its settlement service subsidiaries for allegedly receiving illegal kickbacks in exchange for referrals. The U.S. district court in San Francisco dismissed the case. Read on for its reasoning.

A Missouri appellate court affirmed a damages award against a title insurance underwriter in a case where a company alleged the underwriter failed to secure proper zoning for a proposed biofuels plan, resulting in significant delays in the project. Read on for the details.

A federal court denied a title underwriter’s bid for dismissal in an agent fraud case, saying it would be premature to make a determination as to the scope of the principal-agent relationship prior to discovery. The court did dismiss a negligence claim against the underwriter, since the agency agreement had been terminated prior to the fraud taking place.

A Maryland title agent admitted to stealing clients’ escrow funds to pay personal bills, including her childrens’ private school tuition. Read on for the details.

October Research LLC is airing Part 1 of its 2012 Dodd-Frank Webinar Series this Thursday, July 26. Members of the mortgage, real estate and settlement services industries are urged to attend this 60-minute training. Read on for more on the topics covered and what benefits participants will receive with their registration.

In a case of first impression for the Court of Appeals of the State of Oregon, the court had to determine whether Mortgage Electronic Registration Systems Inc. is considered a beneficiary under the states nonjudicial foreclosure laws. Read on for their decision.