Court Report

After discovering she received an 18-month commercial loan instead of a 30-year residential mortgage, a Montana woman sued the bank and the title company that conducted the closing for fraud, breach of contract, negligence and slander of title. Read on to find out what the Supreme Court of Montana had to say when the case went before it on appeal.

After being victimized by a mortgage fraud scheme, the bank that unknowingly provided the fraudulent mortgage sued the title company that handled the escrow, arguing that the company failed to follow the bank’s closing instructions and notify it when a request for disbursement came in at the 11th hour. The bank argued that had it been informed of the disbursement, it would have stopped the loan. Read on to find out why the Fourth District Court of Appeal of California found in favor of the bank.

Georgia homeowners have sued vendor management companies and the attorneys they work with in two suits in federal court in Georgia. These class action suits allege the companies and attorneys engaged in the unauthorized practice of law, and make claims for violations of RESPA, racketeering and Georgia’s good funds statute. Read on for more details.

Lender Processing Services Inc. has agreed to a settlement with investors, settling claims that LPS misled investors about robo-signing and other improper practices in connection with foreclosures. Read on to find out more about the settlement.

A title insurer sued the president of a mortgagor after he failed to uphold a personal undertaking to indemnify the insurer when the mortgagee insured filed a claim. The claim was for defense in a mechanic’s lien foreclosure which was filed before the mortgage. The personal undertaking was issued specifically so the president of the mortgagor would defend the insurer and the insured mortgagee against the mechanic’s lien. Read on for more details.

A lawyer who was retained to close a real estate transaction failed to obtain a written release of a judgment lien, and as a result, a title insurance company was forced to pay the judgment creditor $10,000. The lawyer reimbursed the title insurance company then sued the seller — his client — for unjust enrichment and equitable indemnity. Read on to learn the court’s determination and what one dissenting judge had to say.

A federal court was asked to determine the timeliness of a claim under a closing protection letter. The case was brought by the FDIC, who in 2009 had stepped in as receiver for AmTrust for loans issued in 2008 that eventually went into foreclosure. The FDIC put a claim into the title underwriter, who then filed a motion for summary judgment based on untimeliness of the claim. Read on to learn what factos the court determined triggers the 90-day notice.

A promissory note holder sued several parties, arguing it is entitled to collect money due under a promissory note on a condominium development. Among others, it sued the title company that conducted the closings of individual condominium units alleging that the insurer negligently transferred title to the units and funds to the developer without verifying the developer’s debt to the promissory note holder. Read on to find out what the Court of Appeals, Second District, California, had to say when the is...

Years after a title company didn’t encumber the entire property being sold to a Texas couple, the couple, and the former owner, were sued by several taxing authorities to collect delinquent property taxes for the years the couple owned the property. The couple then sued the title company for negligence. Read on for more details.

A federal court denied a title company’s motion to dismiss a breach of contract claim, saying the Federal Deposit Insurance Corp.’s complaint alleged a sufficient causal connection between a breach and the damages incurred in a fraudulent real estate deal. Read on for the details.