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

By
Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

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.

 

 

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About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.

 

Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com .

 

His proprietary  "Maitski Line Reports" chart out the absorption rates over the past 14 years in 37 different market areas.  Know when it's a good time to buy or a good time to sell.    

 

His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.

 

Over the years, Tim has optimized his business so that he now can offer a huge 50% commission rebate to his buyers.  The more experience one gets, the easier the job becomes.

 

Tim also has a "Five Days to Sold" System that uses an intensive marketing blitz to create a showing frenzy that creates urgency and offers.

 

Tim is always looking to LinkIn with anyone who is interested in building their social network.

 

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Stacey Smith 10/02/2010 03:02 PM
  2. Tammy Pearce 10/03/2010 01:29 AM
  3. Chris Hill 10/03/2010 01:36 AM
  4. Ruth Vogt 10/03/2010 04:40 AM

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Rainer
403,834
Margaret C. Taylor
Century 21 New Millennium MD - Mechanicsville, MD
St Marys/Calvert/Charles MD Real Estate Agent

I think this is very important.  How can we encourage Buyers to purchase foreclosures that do not have title insurance?  Margaret C

Oct 02, 2010 02:53 PM #1
Rainmaker
563,523
Steve, Joel & Steve A. Chain
Chain Real Estate Investments & Mortgage, Steve & Joel Chain - Cottonwood, CA

Tim,

In CA we find numerous REO sellers directing buyers to "their" title companies...

Steve

Oct 02, 2010 06:11 PM #2
Rainmaker
135,270
Chris Hill
Century 21 New Millennium - California, MD
Your Southern Maryland Real Estate Professional
I'm not sure anyone will be able to purchase these properties without title insurance? This could be a total collapse of a system that is, and has been riddled with improprieties! Actually, I am glad that there is some light being shed on this problem, perhaps it can bring some solutions.
Oct 03, 2010 01:35 AM #3
Rainmaker
498,395
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Margaret,  You're right.  If you can't get title insurance, I wouldn't advise someone to buy it.

Steve and Joel, That could be dangerous  being that you don't know if they have some special exemptions that they stuck somewhere in the fine print.

Chris,  This could be the collapse of the system.  I think many at first thought that it was just a technicality and it would be easy to fix. Now, these fixes are becoming the big problem.  How can a system of laws allow falsification of documents and perjury to go unpunished?  It makes a mockery of the legal system.

Oct 03, 2010 01:56 AM #4
Rainmaker
223,971
Laurie Mindnich
Centennial, CO
Tim, great post. Interesting that Mr. Grayson, despite being aware of the issues for a year or two, is suddenly appearing as a consumer advocate- must be behind in the polls.
Oct 03, 2010 03:25 AM #5
Rainmaker
603,431
Dan Edward Phillips
Dan Edward Phillips, Humboldt and Del Norte Counties, CA - Eureka, CA
Humboldt and Del Norte Counties, CA

Good Morning Tim, thanks for sharing the information in your post, it is appericated!

Oct 03, 2010 03:42 AM #6
Rainmaker
498,395
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Laurie,  You are exactly right.  He's behind in the polls.  But at least he's making the problem known. 

Dan,  Good morning.  Thanks for stopping by.

Oct 03, 2010 04:01 AM #7
Rainer
110,593
Mark Peek
Roseville Rocklin Real Estate - Keller Williams - Roseville, CA
Peek Real Estate Group - Roseville CA Real Estate

Notice that California is a non-judicial state and are not one of the "23", Old Republic is including all Chase properties, regardless of location. This could get interesting.

Oct 07, 2010 06:36 AM #8
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Rainmaker
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Tim Maitski

Truth, Excellence and a Good Deal
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