Dear REO business partner:
As you are all aware there has been much talk in the news over the last few days relating to whether or not the major title underwriters will allow policies to be issued on property that has been foreclosed upon in the name of JP Morgan/Chase, GMAC and others.
On Thursday September 30, 2010 I received a bulletin from my underwriter, Old Republic National Title Insurance Company, advising that they would not allow us to write policy on these properties. And then on Friday, October 1, 2010, I received an updated bulletin from ORT softening their position on the issuance of these polices. ORT has taken the position that they will not underwrite policies of title insurance on these transactions in the following states ONLY:
Florida, New York, Ohio, Illinois, Pennsylvania, New Jersey, Connecticut, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Mexico, North Carolina, South Carolina, North Dakota , South Dakota, Oklahoma, Vermont and Wisconsin. The Attorneys General of these states have opened investigations on allegations of improperly executed documents filed in the foreclosure proceedings. Maryland may get on board with these type investigations, but, at this writing, I have not seen or heard evidence of that.
As of today, it is business as usual as it relates to files that we are currently handling or that you may ask us to handle in the future. Naturally, as is always the case, the title will be run for a full 60 years back, all documents filed with the court will be reviewed and your ultimate purchaser will receive a policy of title insurance, with no additional premium added, to cover them against possible title defects, including defects in the foreclosure filing. If, on the off chance, the prior owners file a law suit against the foreclosure firm/lender alleging improper filings, your buyer and their lender will still be fully protected up to the limits of the policy that we issue. For more information on this please call me directly.
As is always the case, and as I have mentioned previously, it is incumbent on you to advise the buyer that they should seek the services of an independent title agent, well versed in the transfer of REO property to afford them with the assurances that the title will have been researched and reviewed for a period time consistent with industry standards, (not from the date of the title deed to the foreclosed party forward) , that there is an independent set of eyes on the foreclosure transaction and that there is not an actual or perceived conflict of interest.
If you have files in your inventory that other title agents cannot/will not issue title on, please call me and I will try to assist you in getting these files to closing in a timely fashion.
The Preferred Title Group, Inc.
3605 E. Joppa Road
Baltimore, MD 21234