Blogging About Loans: Major Title Insurance Company Has Stopped Insuring Homes Foreclosed by JPMorgan Chase

An office of elite mortgage lending professionals with a common interest and goal focused on providing customer service that exceeds expectation. Thereby building our business from repeat and referral opportunities. Ruth Vogt. LMB 100023827. NMLS 257576. Regulated by the Division of Real Estate. Fairway Independent Mortgage is an Equal Housing Opportunity.

Major Title Insurance Company Has Stopped Insuring Homes Foreclosed by JPMorgan Chase

Looking for foreclosed homes in Denver

Yikes! I am reblogging this story because there are some very important issues here that need to recognized by our industry when buyers start looking for foreclosed homes!

Good information for buyers who are looking for foreclosed homes in hopes of finding the best return on their investment. Often these properties provide just that, but as the article below indicates, there are some dangers when it comes to getting title insurance.

Having a real estate to represent your interests is always a must. But especially if you are looking for foreclosed homes hoping to find a great value.

Be prudent in your search when looking for foreclosed homes.

If you are not currently working with a real estate agent, give me a call for a recommendation in the Denver area!

Ruth Vogt

720-489-0712

ruth@wrstarkey.com

The sale of many foreclosed homes could become very difficult if this policy starts spreading.

The company, Old Republic National Title Insurance, told its agents Friday that it would not write policies on foreclosed Chase properties until "the objectionable issues have been resolved," according to a memorandum sent out by the firm's underwriting department.

Chase isn't the only company having issues with title.  GMAC and Bank of America are delaying foreclosures until they see if they can straighten the title issues.

Here's a good article to get up to speed on the issue.  In a nutshell, most banks that are foreclosing on homes probably don't have the legal authority to do so. Shortcuts were done in the transfer of titles during the  securitization of the mortgages in order to save time and money.  Now many banks are creating fraudulent affidavits and creating and back-dating documents that they had previously intentionally destroyed.  It's one big mess that the banks created.

If other title companies follow suit or write policies with exemptions for these issues,  the sale of foreclosures could come to a standstill.

One proper way of clearing this all up is to disassemble the mortgage backed securities and have the originating banks buy them all back.  Then the originating bank will have a valid title again and will then be in an legal position to foreclose on the home.  The banks will fight tooth and nail not to let this happen because it will mean that they will be the ones eating the losses from the foreclosures and not the investors of the mortgage backed securities.  This will probably bankrupt most of the major banks who were the source of these mortgages. 

But this would be the right thing to do and it would place the losses where they belong, on the banks who originated these loans and on the buyers who took out these loans.  The system would be cleansed and the banks that weren't involved would be in a position to grow and prosper and rebuild the banking system.

Alan Grayson, a Congressman in Florida, did a nice video covering the issues with the faulty titles.  He's pretty much all talk and no action and is doing a little political grandstanding in order to try to get re-elected next month.  But at least it's a start.

 

 


Opinions expressed here are the sole responsibility of the author, and do not necessarily reflect the view of Fairway Independent Mortgage.

Ruth Vogt Colorado Mortgage Lender Ruth Vogt, Sales Manager

 #LMB100023827, NMLSR# 257576

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Comment balloon 7 commentsRuth Vogt • October 03 2010 11:40AM

Comments

Ruth, thanks for reblogging, I missed the original.

Tim probably jumped the gun with his:

"most banks that are foreclosing on homes probably don't have the legal authority to do so." Unless a court rules otherwise a transfer of servicing is not necessarily a transfer of title.

His concept of dismantling the mortgage backed securities is interesting on three fronts. 1) Without mortgage backed securities, lending will grind to a stop because the banks will be forced to meet the reserve requirements for every dollar of depositor money on loan. 2) The banks are ignoring buy back requests from Fannie and Freddie, to the tune (at last count) of more than $11 billion. 3) IF a transfer of servicing is ruled as a transfer of title, which will require all the necessary legalities, the only lenders in business will be the major banks.

Posted by Greg Cook, Mortgage Consultant NMLS ID# 283159 (Platinum Home Mortgage) about 8 years ago

Great post

I had heard of this but assumed it was rumors.  Great! Stop the forclosures.  Give the owners a change to deal with their original bank.  Every time there is a forclosure to list there is a family without a home.  I think many agents are lowballing BPO's to get a listing that will sell quick. AND GET PAID. Then the home for far less than is should and is the new comparable for the market.  Buyers know of this low price and keep waiting on them a home at a STEAL.

Posted by Brian Keller, Realtor (Brian Keller Realty) about 8 years ago
Hi Ruth, I heard on the news that Chase, and BOA had temporarily halted their foreclosures due to paper trail problems - I didn't know about the Title Company issue. It will be interesting to see how this all shakes out.
Posted by Mary Douglas, REALTOR, Red Feather Lakes, Colorado (United Country Ponderosa Realty, Red Feather Lakes, Colorado) about 8 years ago

Greg, You are probably right. "Most banks" may well be a bit of an exageration???

Brian, Stop foreclosures is a chant we'd all like to chime in on. Too bad the market offers so many.  :(

Mary, I think we will be hearing a lot more about unexpected issues that may be popping up. We'll see????

Posted by Ruth Vogt, 719-592-0855 Apply 24/7 www.ColoradoHomeLender.com (Fairway Independent Mortgage, LLS. Equal Housing Opportunity. Regulated by the Division of Real Estate.) about 8 years ago
Thanks for reblogging I was surprised not to see more discussion on this. I agree there could be a major impact on foreclosures. Margaret C.
Posted by Margaret C. Taylor, St Marys/Calvert/Charles MD Real Estate Agent (Century 21 New Millennium MD) about 8 years ago

Commenter #6, The blog was actually about titlel companies having a concern over issuing title work. I think your comments are interesting, but may be better served if you write your own blog taking the conversation thread down another path. (And maybe you somehow felt there was a tie in, but I missed it???) Respectfully, I am deleting your comment giving you the opportunity to make your post on anarchy. I'll be watching for your post...

Posted by Ruth Vogt, 719-592-0855 Apply 24/7 www.ColoradoHomeLender.com (Fairway Independent Mortgage, LLS. Equal Housing Opportunity. Regulated by the Division of Real Estate.) about 8 years ago
Margaret, I agree... I fear we won't start having any discussion until deals start hitting a brick wall at the closing table?? :(
Posted by Ruth Vogt, 719-592-0855 Apply 24/7 www.ColoradoHomeLender.com (Fairway Independent Mortgage, LLS. Equal Housing Opportunity. Regulated by the Division of Real Estate.) about 8 years ago

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