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Here It Comes: Title Insurance Problems
The Market Ticker ^ | September 30, 2010 | Karl Denninger

Posted on 09/30/2010 10:26:19 PM PDT by Future Useless Eater

Now we got trouble.

I am in receipt of a copy of a bulletin from Old Republic Title in which it states:

The Company will not insure title to any property which has been foreclosed by Ally Financial, Ally Bank or GMAC until further notice.

Oops.

I suspect this is going to spread fast, given that this "wee problem" is NOT specific to GMAC and Ally.  In fact, JP Morgan/Chase has reported "similar discrepancies", and then today we had my report on a ruling from a court in which a counterfeit summons was issued not by the court, but by a law firm.

There isn't going to be any clean way to fix this folks.  These bad affidavits and other forms of fraud upon the courts render these judgments voidable.  Title companies are potentially on the hook if they write a policy on such a home and the title turns out be not just clouded but unmarketable as there's a valid claim that someone else holds!

This crap has to be cleaned up and the firms and individuals involved must face SEVERE sanction for these acts.  If in point of fact, as I have suspected, there is no actual conveyance into the MBS trusts that ever took place (and as I noted, this too has been documented in at least some cases) then we have a ****storm of biblical proportions.

The institutions involved in this cannot be allowed to paper over it or "get away with it."  Private property ownership is the foundation of this nation.  If these banks and their agents have in fact done what it appears they have done, these institutions and firms must be dissolved and their principals prosecuted to the fullest extent of the law for each and every forged, counterfeit or fraudulent document, and the titles must be unwound, with funds returned to the sellers up the line, until a clear and clean status is regained.



TOPICS: Business/Economy; Extended News; Government; News/Current Events
KEYWORDS: ally; allybank; allyfinancial; foreclosure; foreclosuregate; gmac; mortgage; title
It looks like our banks are now in even deeper $hit !!

Would you buy a foreclosed house if you could NOT get title insurance? or even COULD you buy it?

1 posted on 09/30/2010 10:26:21 PM PDT by Future Useless Eater
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To: TigerLikesRooster; Ernest_at_the_Beach; MamaDearest; nuconvert; Srirangan; RobinMasters; ...

ping


2 posted on 09/30/2010 10:27:48 PM PDT by Future Useless Eater (Chicago politics = corrupted capitalism = takeover by COMMUNity-ISM)
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To: Future Useless Eater

ping to read replies later


3 posted on 09/30/2010 10:33:19 PM PDT by Apple Pan Dowdy (... as American as Apple Pie mmm mmm mmm)
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To: Apple Pan Dowdy

Hi Apple! I haven’t seen you around in ages. I, too, want to read the replies to this thread.


4 posted on 09/30/2010 10:35:45 PM PDT by ChocChipCookie (TheSurvivalMom.com)
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To: Future Useless Eater
Happens every day. Foreclosures come with a quit claim.

Buyer can apply for a mortgage, provide a survey, and have a title search done and title company will insure the mortgage if there's no problem. It's just procedural.

5 posted on 09/30/2010 10:41:05 PM PDT by Sacajaweau (What)
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To: Future Useless Eater
What Chris Dodd, Barney Frank, and (since 2006) democRAT control of congress has done to our banks and economy.
6 posted on 09/30/2010 10:44:29 PM PDT by Future Useless Eater (Chicago politics = corrupted capitalism = takeover by COMMUNity-ISM)
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To: Sacajaweau

But a quitclaim deed only transfers the interest that the transferor “claims” to have. There is no warrantee of...anything, really.

If this gets going, I seriously doubt we will see title cos eager to insure quitclaim (or any other type) of deeds where title can be shown to have passed through the hands of suspect entities over the past few years.

Denninger is right....this is potentially a s**tstorm of epic proportions. IMO.


7 posted on 09/30/2010 10:50:38 PM PDT by Attention Surplus Disorder ("No longer can we make no mistake for too long". Barack d****it 0bama, 2009, 2010, 2011.)
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To: Future Useless Eater

Anyone here who DIDN’T know this was coming, raise your hand!

November can’t come to soon for me!


8 posted on 09/30/2010 10:59:17 PM PDT by LUV W (DIMs?......start packin'--you're fired!....I can see November from my house!)
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To: Attention Surplus Disorder
Big bank foreclosure delays signal big trouble

JP Morgan Chase told CNBC on Wednesday that it will delay more than 56,000 foreclosure proceedings due to paperwork that was signed, "without the signer personally having reviewed those files."

9 posted on 09/30/2010 11:10:38 PM PDT by MamaDearest
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To: Future Useless Eater

This is a serious problem that will likely require state level remedial legislation.


10 posted on 10/01/2010 12:05:23 AM PDT by Rockingham
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To: MamaDearest
JP Morgan Chase told CNBC on Wednesday that it will delay more than 56,000 foreclosure proceedings due to paperwork that was signed, "without the signer personally having reviewed those files."

I used to drive the mortgage brokers crazy by actually reading the documents at a signing. "Nobody does that." "That" was nearly 20 years ago. I can only imagine...

11 posted on 10/01/2010 12:09:14 AM PDT by Carry_Okie (Managing "The Environment" is the power to control the entire economy.)
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To: Carry_Okie
I used to drive the mortgage brokers crazy by actually reading the documents at a signing. "Nobody does that." "That" was nearly 20 years ago. I can only imagine...

20 years ago, closing on the house I am in now, I read all the documents (or tried to!) with one of the realtors constantly piping up with irrelevant comments. That woman could not stand a moment of silence...I had to keep stopping to give her the evil eye, so that I could read the papers I was putting my signature to.

And even at that the lawyer had messed it up. He had to go back months later and file corrections, I forget exactly what.

12 posted on 10/01/2010 1:02:48 AM PDT by thulldud (Is it "alter or abolish" time yet?)
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To: thulldud
And even at that the lawyer had messed it up.

Mine too. They had blown the interest rate and given me a rate a full point lower than that upon which we had agreed. Of course, anything I signed was binding on me, while anything they wrote that I signed they could change within three days.

We're within sight of owning our home, and do I ever want to burn that piece of paper.

13 posted on 10/01/2010 1:16:58 AM PDT by Carry_Okie (Managing "The Environment" is the power to control the entire economy.)
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To: Carry_Okie
We're within sight of owning our home, and do I ever want to burn that piece of paper.

Finished up that mortgage last year. Now all that is left is the annual "rent" charged by the lord of the manor (property tax).

Meanwhile, I still have all my mortgage statements, etc. I take them out every so often to gloat, anticipating a merry bonfire once I tire of it.

14 posted on 10/01/2010 1:29:59 AM PDT by thulldud (Is it "alter or abolish" time yet?)
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To: Rockingham

Sorry, this seems like much ado about very little. It appears that the banks have been trying to save some expense by “mass-producing” foreclosures. These errors are very minor and can be easily corrected. The foreclosure process will slow down, expenses will go up for foreclosing lenders (maybe in a few cases the expense may even make foreclosing uneconomical), and some lenders may have to pay damages for not following required foreclosure procedures; but there will be no massive land-title problems.


15 posted on 10/01/2010 2:20:34 AM PDT by olrtex
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To: olrtex

these are not minor problems in foreclosure.

It is like the black knight saying “tis but a scratch” (no appologies to monty python)


16 posted on 10/01/2010 2:23:39 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: Sacajaweau

you want a warrenty deed not a quit claim deed.

The next step is to have suits to “quiet title” and extinguish all claims.

We need a total reboot of mortages. Banks have been paid off. The only losers will be the mills.


17 posted on 10/01/2010 2:28:34 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: MamaDearest

so the banks will announce that SOMEONE has now actually “read” the documents.

IOW the signor in Ohio is not notorized by someone sitting in texas.

It does not matter because judges are ignoring the law anyways.

There is no senile old judge insurance.


18 posted on 10/01/2010 2:42:12 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: olrtex
I think you are at best partially correct, these are going to fall into two catagories:

1. Minor paperwork issues that slow down the foreclosures by a few months at most.
2. Major Paperwork problems that leave the bank, city/county, and Homeowners fighting over the title for years, and will impact the value of the property for 7-10 years at a minimum. I am talking about those properties where you have two or more banks trying to foreclose on the same house, multiple tax liens, and abandonment.

19 posted on 10/01/2010 3:22:41 AM PDT by Fraxinus (My opinion, worth what you paid.)
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To: longtermmemmory
It's spelled Warranty.

Quit claims occur for different reasons.

Lawsuits are not involved in these matters.

You're guessing and you're not even close.

20 posted on 10/01/2010 3:25:17 AM PDT by Sacajaweau (What)
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To: olrtex

The real property title insurance business is driven by a combination of abstract legal doctrines and prudential considerations. For title insurers, even a remote legal vulnerability can be a severe insurance risk if a large class of policies are subject to it. A single court decision that reopened foreclosures across the state could put the insurers on the hook to provide a lawyer to pay damages or clear and defend property title for many thousands of title insurance holders.


21 posted on 10/01/2010 3:41:19 AM PDT by Rockingham
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To: thulldud

Funny story for me, years ago, I was doing a refi. Set my appointment up for 1PM as I did not want to get caught in commute traffic from Dallas. I cooled my heals in the waiting room till after 3, when the closer came back from a long lunch. The embarrassed receptionist pointed to me and said, your 1PM is waiting for you. She said no problem this will only take a few minutes to do while casting an annoyed look at her for noting she was late. She came back with my closing file and we went into a conference room. That was when I put on my reading glasses to read every word and took out my calculator to check every calculation. I did find a math error which she had to fix herself as the staff had left! She kept babbling this is not necessary as any mistake will be fixed under the law that allows for that. We finished after 7PM. When I departed, I said I hope you enjoyed your lunch and have a nice late dinner date!


22 posted on 10/01/2010 3:43:32 AM PDT by Mouton
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To: Future Useless Eater

this could become a big mess


23 posted on 10/01/2010 5:49:25 AM PDT by phockthis
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To: Carry_Okie

When I bought my first house in the early 90’s I had to sign 5 documents at the bank to close. When I bought my current house in 2001 my hand got cramps from all the signing required...


24 posted on 10/01/2010 8:10:27 AM PDT by sarge83
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To: Mouton
When I departed, I said I hope you enjoyed your lunch and have a nice late dinner date!

You so ba-a-a-ad....

25 posted on 10/01/2010 11:18:06 AM PDT by thulldud (Is it "alter or abolish" time yet?)
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To: Future Useless Eater
So now there are THREE big banks admitting their title integrity sucks so badly they had to suspend foreclosures:
(GMAC / Ally), (JpMorgan / Chase), and BofA.


Plus a fourth: Wells Fargo, now takes a different tack: stick all buyers with the added title risk...

The Market Ticker guy just said this...
Wells has been demanding releases from its buyers for title defects - so now by refusing to allow things to settle out in order to complete a short sale the buyer has to take a potentially-clouded or even unmarketable title for which they will have NO RECOURSE.

If you're doing business with Wells in any capacity at this point, you are, in my opinion, dumber than a box-o-rocks.

http://market-ticker.org/akcs-www?post=168041

Latest Real Estate Time Bomb: Title of Foreclosed Properties Clouded; Wells Fargo Dumping Risk on Hapless Buyers
26 posted on 10/02/2010 9:52:25 AM PDT by Future Useless Eater (Chicago politics = corrupted capitalism = takeover by COMMUNity-ISM)
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To: Future Useless Eater
Now We Got Trouble: Title Insurance  

Ok, here we go.

As The New York Times is reporting:

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.

I have a copy of the original memo in which they said they would not insure GMAC/Ally mortgages earlier in the week.   I declined to name Old Republic because despite trying to get them on the phone and verify the authenticity of the document, the person identified as the contact point for questions refused to talk to me - and so did both their corporate relations AND legal departments.

However, since The Times will run with it, the cat's out of the bag along with the name.

I expect Bank of America will be added to this list shortly.

Without title insurance you cannot get a loan for a property.  And you're an idiot to buy even for cash without a Title policy.  If there's a problem you could easily find out that you bought an empty box - and have nothing.

One other, and very-important point.  Most title policies are rather complex.  Even though there are several large title firms and even more small ones, DO NOT take the fact that one or more will offer a policy as an indication that "all is ok."  This is not necessarily true.

DO NOT BUY ANY REAL ESTATE IN THIS ENVIRONMENT WITHOUT AN ATTORNEY OF YOUR OWN SELECTION GOING OVER ANY PROFFERED TITLE POLICY BEFORE YOU PAY FOR IT AND CLOSE THE TRANSACTION, AND GET THEM TO EXPLAIN EXACTLY WHAT EXCLUSIONS AND CONDITIONS ARE IN THAT POLICY.  WHEN WRITING OFFERS MAKE SURE THAT THE AVAILABILITY OF A TITLE INSURANCE POLICY ACCEPTABLE TO YOU IS ONE OF THE CONDITIONS OF THE SALE AND DO NOT WAIVE IT UNDER ANY CIRCUMSTANCES PRIOR TO CLOSING.

SOME BANKS HAVE "CAPTIVE" TITLE COMPANIES, AND IT WOULD NOT SURPRISE ME ONE BIT TO FIND THAT THEY, AND TITLE INSURERS GENERALLY, ARE EXCLUDING SOME POSSIBLE LOSSES, LEAVING THEM WITH YOU, ESPECIALLY FOR OWNER'S TITLE POLICIES.

SUCH A "CARVE OUT", IF IT EXISTS, COULD LEAVE YOU WITH NO TITLE COVERAGE IF THERE IS A PROBLEM WITH A PREVIOUS SALE OR FORECLOSURE.

THIS COULD RESULT IN LOSS OF THE HOUSE AND ALL MONEY YOU SPENT ON IT.


27 posted on 10/02/2010 11:34:49 PM PDT by Future Useless Eater (Chicago politics = corrupted capitalism = takeover by COMMUNity-ISM)
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To: Future Useless Eater

...


28 posted on 10/03/2010 12:06:10 AM PDT by brityank (The more I learn about the Constitution, the more I realise this Government is UNconstitutional !! )
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To: Future Useless Eater

didn’t they also all take TARP $ ?

I believe US Bank was one that refused.


29 posted on 10/04/2010 12:20:29 PM PDT by WOBBLY BOB ( "I don't want the majority if we don't stand for something"- Jim Demint)
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To: Attention Surplus Disorder

they first have to show “standing”. if they can’t do that, they have no right to be in the courthouse. hint: most of them can’t prove standing.


30 posted on 10/04/2010 12:40:33 PM PDT by tweakDU
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