Fidelity National’s Role in the Cover-Up

I’ve got a slightly different take than DDay on the news that Fidelity just established a policy requiring lenders to warrant all foreclosure sales going forward.

Fidelity National Financial Inc., the largest U.S. title insurer by market share, will require lenders to sign a warranty assuring their paperwork is sound before backing sales of foreclosed homes.

An indemnity covering “incompetent or erroneous affidavit testimony or documentation” must be signed for all foreclosure sales closing on or after Nov. 1, the Jacksonville, Florida- based company said in a memorandum to employees today. The agreement was prepared in consultation with the American Land Title Association and mortgage finance companies Fannie Mae and Freddie Mac, Fidelity National said.

DDay argues that Fidelity National is basically asking for a guarantee that it won’t have to pay off any claims on title problems.

I’m sure the health insurance market would love a clause that forced the maternity ward to sign a warranty that the baby they birthed into the world will be healthy their entire life, or else they pay up. I do understand the title insurers’ complaint, and I’m glad they’re forcing the issue with the lenders, but I can’t help but find it a little weird. If the banks are paying on the insurance, I’m not sure we need a title insurance industry.

Now, I’m not an expert. I’m just someone who has been considering whether she should still be looking to buy a house in this market. But as I understand title insurance the biggest part of the service they offer–what you’re paying them for–is not risk going forward, but rather a competent and thorough search for any outstanding title problems. Here’s one explanation:

Because title insurance protects against what may have happened in the past, most of the expense incurred by title companies or their agents is in loss reduction. They look to reduce losses by finding and fixing defects before the policy is issued, in much the same way as firms providing elevator or boiler insurance. These types of insurance are very different from life, property or mortgage insurance, which protect against losses from future events over which the insurers have no control.

So I take this move not as an effort to avoid paying any claims. I take it as an admission from Fidelity National that it cannot or will not adequately do that main part of its job: review the documents on a house and make sure the documents say what they appear to say. Instead of doing the forensics required to check that documentation (lawyers challenging foreclosures have proven fraud by showing notary stamps post-date the purported signing of the notarized document, comparing signatures to prove some are forgeries, and pointing to allonges not attached to the actual note, among other things) on every sale, they’re simply demanding that banks claim they don’t need to do that work.

Note, too, that Fidelity National instituted this policy (as distinct from the agreement it signed with Bank of America on the day BoA halted foreclosures) in consultation with Fannie and Freddie. That is, in consultation with government owned entities holding a majority of the mortgages out there.

So the government and Fidelity National have gotten together and said, “rather than actually check for fraud we’ve got abundant evidence exists not just in foreclosures being processed now, but in foreclosures already sold and–significantly–in performing loans that were securitized at the height of the boom, let’s just have the banks sign off on any foreclosures going forward.” As a particularly nice touch, they’re describing this fraud not as fraud, but “incompetent or erroneous affidavit testimony or documentation.”

From the standpoint of an industry and a government hoping to prevent people from learning about the extent to which our property system has been tainted by the banksters, that might be shrewd. After all, the most common time for real people to challenge bank conduct here is when they are foreclosed on or when they buy a house–when they are involved in a legal transaction. We only came to understand the true extent of foreclosure fraud after foreclosure and bankruptcy lawyers had dealt with such volume of cases that they came to learn the tricks of the servicers and even reviewed enough documents to have solid evidence of notary and robosigner fraud. By getting indemnity from the banks, Fidelity National (and our government acting through Fannie and Freddie) will ensure that one entity at least will continue to offer lenders title insurance, helping them unload those properties that may or may not have fraudulent title, but will never look closely at the documentation to see if there has been fraud. Fannie and Freddie just worked with Fidelity National to ensure that 38% (Fidelity National’s market share) of the 25% of all homes that are sold that are foreclosures will never have their title examined closely. 9.5% of homes will be sold without the thorough paperwork review that everyone knows should be done at this point, thereby ensuring not only that the market will continue to move, but also that banks always have a way to sell a house without the title insurer doing its job, but instead relying only on the bank’s say-so for the most likely title problem.

But the thing is, they may well get away with it (or, at the very least, minimize bank losses). As I said, we’re only going to learn about faulty title during legal transactions. And title insurance is required for mortgaged home sales to protect the lender, but not to protect the homeowner. And the lenders are, as often as not, the same servicers that are trying to unload these properties. They, as an industry, have an incentive to get the homes into the hands of someone who will pay for it (regardless of how troubled the title) without much scrutiny on the practices of the last decade. Presumably they hope that ten and twenty years from now, no one will remember how troubled these titles really are.

And the only other time anyone is likely to look closely at these titles is if and when investors start demanding that the banksters take their shitpile back. But that will only be litigated on a loan by loan basis. Which means, for people still paying their mortgage, no one is going to look at whether the banks screwed up ownership during their bubblicious frenzy.

It is almost certainly not an accident that Fidelity National, in conjunction with Fannie and Freddie, just implemented this plan on the same day that the Administration rolled out its “look forward, never look backwards campaign.” After all, for Shaun Donovan to claim with a presumably straight face that a review that has been ongoing since May has found no systemic problems, he has to be sure that most people will never check his claim.

The lesser, third issue that has been raised, Donovan said, is whether the process underlying the securitization of mortgages is “in question.”

“So that’s the point that I’m trying to make, is that the issues that we are finding … that we’re focused on are, ‘Are there particular servicers that are not following these processes?'”

Donovan added that “we have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.”

And this deal–ensuring that the biggest title company will never look too closely–is a key part of making sure that no one will check Donovan’s claim.

  1. Rayne says:

    I’m going to throw out another little wrinkle.

    Who/what/when approved the last couple of acquisitions Fidelity National made which positioned it to hold more than 50% of the title insurance market?

    Didn’t anybody at all question whether a lack of competition might lead to a failure to provide competitive, competent service?

      • Rayne says:

        Yeah…so like the week of the 2008 election, not quite two months after the market crash, Fidelity and LandAmerica have been talking about an acquisition and Fidelity gets all spooked because of what it saw on LandAmerica’s books and Fidelity backs out.

        08-NOV-2008 — Potential merger/acquisition announced, between Fidelity and LandAmerica;

        24-NOV-2008 — Deal falls apart and LandAmerica’s valuation plunges;

        26-NOV-2008 — LandAmerica declares bankruptcy.

        ??-???-2008 — [something-something-something]

        16-DEC-2008 — Fidelity acquires LandAmerica’s subsidiaries Commonwealth Land Title Insurance Company and Lawyers Title Insurance Corporation, with closing expected 22-DEC-2008 after the Hart-Scott Rodino application period ends.

        Um, yeah. Nice how that timing all worked out like that.

        This was a completely different acquisition by 16-DEC-08; why didn’t the Hart-Scott-Rodino period end in 2009?

        • Rayne says:

          I should point out a few more things:

          — [something-something-something] had to happen between the bankruptcy declaration and the announcement of the acquisition of subsidiaries. It just wasn’t reported to the public. It’s another example of what we are simply supposed to accept on the face of it like the Underpants Gnome’s M&A process.

          — It’s extremely convenient that LandAmerica’s price plummeted into penny stock territory, and that only a few subsidiaries were bought, not the entire package.

          — And look, all wrapped up with a bow on it before the traditional insurance industry’s double-whammy end-of-quarter/end-of-quarter reporting, so the big yellow books published under NAIC guidelines are all neat and tidy.

          The timing is just incredible for organizations this fucking big. Like clockwork.

          • PeasantParty says:

            Yep. Stinks like rotting herring. Guess what else? Bear Sterns is still listed as owning millions of mortgages. Funny that, right?

          • masaccio says:

            Now that I think of it, it is odd. Usually you don’t buy from a company about to file bankruptcy, because you can usually get it cheaper in Chapter 7, and often in Chapter 11. That might have been the case here, but maybe not. LandAmerica was trying to sell so it could get cash to settle with 1031 investors (see comment 51, I’m pretty sure that is the applicable IRC section).

            When it filed, it gave other investors a chance to bid on the title companies. That might have been a good outcome for either side. I wonder if Fidelity National paid more or less than the pre-bankruptcy price.

            • Rayne says:

              I wish my buddy with the reinsurance background was here instead of globe-trotting. Really need some help with trying to unwind the possibility there were other side bets that tanked which complicated the LandAm situation. It seems to be there was something worse on the books to spook Fidelity.

              And looks more like an incentivized shotgun marriage; the Hart-Scott-Rodino period should have been tweaked/reset/modified if there were such complications, don’t you think? Instead it smells more like another Bear Stearns event.

        • masaccio says:

          Rayne, the LandAmerica bankruptcy was caused by the seize-up in the auction rate securities market. It owned two title companies, one of which was Lawyers Title. When people sell investment property, they don’t have to pay capital gains tax on the profit if they reinvest in another piece of investment property within (I think) 18 months. To meet the requirements of the Internal Revenue Code that make this possible, they aren’t supposed to take control of the money.

          LandAmerica offered to invest it for the investors, and took fat fees for doing it. The money went into auction rate securities because they paid a bit better than money market funds. When LandAmerica couldn’t redeem its auction rate securities, it allegedly began funding payments to previous investors with money from new ones. It did that right up to the date of the bankruptcy.

          People lost millions. LandAmerica couldn’t care less.

    • emptywheel says:


      So you’ve got a majority share title company working with the majority share mortgage owner that the government owns to ensure that banks the government recently deemed too big to fail can continue to feed the hamster wheel. If in fact I’m wrong, and this agreement to simply not look at the title problems ultimately fails, then the govt–which of course entered into this agreement with Fidelity–will be sort of obliged to bail out the banks who promised they didn’t commit the fraud we all know they did.

      How can anyone with a straight face claim any of these companies are private sector any more?

  2. parsnip says:

    Anecdotal data point: We sold our house in July. After the contract was ratified in May the title company sent us a form inquiring whether we had bought the home longer ago than (IIRC) 5 years. On a subsequent phone call we asked why that mattered, and wouldn’t they find that out when they did the title search? Sorry I can’t remember exactly what the reply was, but I think it had to do with charging more to do the search, if the paperwork in question was within the past 5 years. We had paid off the mortgage 5 years ago. The impression I got was that the title co. person was relieved that there would be no problem doing the title search on our house. The entire process had a surrealness to it, because the title co. kept rushing things and scheduled closing originally during the window when flood insurance had lapsed, and the buyers couldn’t get a mortgage without flood insurance. Then, when the senate finally passed the bill reinstating flood insurance, the closing was scheduled before the president had signed the bill. Meanwhile the person at the lending bank handling the file took a 4-day July 4th weekend, forcing the closing to be pushed off further. The title company people were frantic about the delays.

    I can’t believe how lucky we were to have sold that house before TSHTF. We actually received more than we’d paid for it at the beginning of the bubble. It’s great to be mortgage-free and no title worries.

  3. harpie says:

    And this deal–ensuring that the biggest title company will never look too closely–is a key part of making sure that no one will check Donovan’s claim,

    It’s the TRIPLE F [Fidelity, Fannie and Freddie] deal.

  4. PeasantParty says:

    You are correct about Title Insurance. It is to protect the homebuyer from clouds on the title. However, it has been morphed into protecting the loan companies as well. It is a big woven basket of screwed up now and if the banks are expecting to yank peoples homes out from under them, the title insurance company cannot bear the burden because they did not follow proper recording procedures. We are finding out now that there is no chain of title for whom may own the mortgage note on property now.

  5. David Dayen says:

    I would put it in the “cannot” rather than “will not” box. The confusion of securitization has basically made it impossible for the title insurance companies to do their job. So they’re putting the losses back on the banks, and they’re putting the responsibility to figure out who owns a particular title on the courts. After all, the warranties by the title insurers doesn’t preclude borrowers from making a legal case on the home.

    • econobuzz says:

      We will shortly be in a position where taxpayers are guaranteeing everything that everyone of these crooks is doing as well as guaranteeing (and bailing out) the crooks themselves.

      Actually, we may already be there.

    • PeasantParty says:

      Right, I said above the Title Insurance companies cannot withstand the title mess the banks have caused.

      Lemme tell you, I am mad as HELL! Both of my sisters were hosed good. One with Ocwen and the other with Chase. They are fighting like wildcats to get it straight but the entire industry is against them.

      • econobuzz says:

        Both of my sisters were hosed good.

        Forget Krugman’s epitaph for the Obama administration. This should be the epitaph:

        (Fill in the blank) were hosed good.

    • emptywheel says:

      Borrowers will first have to cover their OWN asses, because title insurance is only required to cover the lenders.

      But that was my point about when real people get to ask banks about title: during a legal transaction. Unless some trial lawyer figures this out (for this reason alone the banks are probably praying Grayson does win reelection, because he’d be great at this kind of suit), no one is going to be able to afford to do this in systemic fashion.

      Besides, I think it’s absolutely false that title companies can’t do this work. Foreclosure lawyers are already doing it–many of them as overworked legal aid lawyers–and they have a lot harder time getting the documents the title companies can demand, and they have a much more partial view of the kinds of fraud that went on.

      • econobuzz says:

        I hear Barry is going to allow BofA to set up its own court system also. To make sure mortgagors are treated fairly.

      • Minnesotachuck says:

        for this reason alone the banks are probably praying Grayson does win reelection, . .

        I know I’m a bit dense at times, but did you forget a “not” in the above sentence? As in

        for this reason alone the banks are probably praying Grayson does not win reelection, . .

      • Mary says:

        Borrowers will first have to cover their OWN asses, because title insurance is only required to cover the lenders.

        Title insurers are required to cover the insured person/entity on their policy. Most lenders won’t loan unless they are goign to recieve a lender’s policy (so the lender requires a lenders policy, it’s not that the policy itself is only required to cover the lender). But most owners also get an owner’s policy (and pay a reduced, simultaneous issue rate for it) and if so, title insurance is “required” to cover the owner there.

        Keep in mind, too, that defense lawyers in foreclosure actions are in a really really REALLY different position than title companies. The title company function is to see if the foreclosure order was signed by the judge, recorded in the real estate records, etc. – not to represent the foreclosed parties in the litigation.

        • emptywheel says:

          My biggest problem with that, though, is foreclosures ARE a more likely sale for buyers not to get the insurance AND if they’re getting it from the same company it means the interests of the insurer and the bank are aligned in the same way the interests of S&P and the MBS sellers were.

          At this point you need to have someone independent representing the needs of the buyer, bc everyone in the market has the same aligned interests as existed at the height of the boom in pretending that this is a smaller problem than it really is.

          I understand the necessity to keep moving houses that have been legitimately foreclosed (though if it were harder, than it would also mean the servicers would fulfill their obligation to try for a mod). But what this does, it seems to me, is keep the process of unwinding this on the backs of the homeowners in place, without using this as an opportunity to systematically go back and clean up the shit.

          Again, I don’t think this shit will be found unless someone has hte incentive to look at this in detail, which is mostly going to happen during a foreclosure, but that’s assuming the homeowner has enough legal support to do that work (which they don’t). So this just lets the whole fraud advance to the next layer in the process w/o ever putting the people who should be out of business out of business.

        • emptywheel says:

          Keep in mind, too, that defense lawyers in foreclosure actions are in a really really REALLY different position than title companies. The title company function is to see if the foreclosure order was signed by the judge, recorded in the real estate records, etc. – not to represent the foreclosed parties in the litigation.

          Doesn’t this go back to William Ockham’s point, though? They may not care about foreclosure, per se (except insofar as foreclosure is the means by which the larger title fraud is being exposed). But they do care about outstanding liens that arise because of the large title fraud.

          • Mary says:

            & @44

            My biggest problem with that, though, is foreclosures ARE a more likely sale for buyers not to get the insurance AND if they’re getting it from the same company it means the interests of the insurer and the bank are aligned in the same way the interests of S&P and the MBS sellers were.

            Yes,no,maybe. Most purchasers on RESIDENTIAL foreclosure property are still going to be buyers who go though a traditional lending process so they should be no more or less likely to get an owner’s policy to go with their required lenders policy than any other purchaser who is buying with funds that are going to be secured by a mortgage.

            The second big category of purchasers is going to be speculators/vultures. My heart won’t bleed for them if they fail to get an owners policy, but they are some of the least likely to not get that kind of protection, since title insurance is a very affordable, one time payment and, more importantly, when they get ready to flip a property it is going to be much easier to finance on to their purchaser if there is existing title insurance that only has to, in essence, be brought forward.

            The third big category is lenders who bid in on their own lien bc sales prices are so depressed that no one is bidding at an acceptable level. This is where your heart really really doesn’t bleed bc they not only have the risk of their faulty foreclosure, they have to warrant to a title company that they did everything right to get their own owner’s policy (which they are likely to be required to have by statute) so they can be pursued by both the foreclosed ex-owner and the title company.

            Now if the purchaser is buying in essence from the court (under the first and second categories, bidding in at the foreclosure) then the buyer’s lender or the buyer and the foreclosing bank do not have aligned interests. The title company who writes title there is assuming a different risk (bc of the foreclosure) than it did (if it was the title insurer for the old mortgage transaction) when it wrote title for the old mortgage transaction. So it’s interest is not aligned with the foreclosing bank – it is assuming the risk of loss created by the foreclosing bank screwing up, so the title company has a real interest in trying to make sure they didn’t screw up. Once title is written, then the title company is going to be aligned with the purchaser’s lender and the purchasers who got owner’s policies in claiming that the foreclosure sale was valid. That puts them adverse to the foreclosed interest holder – but aligned with the foreclosure purchaser.

            So once a title company writes title and insures over any defects from the foreclosure sale – those defects are the title company’s risk. If the bank screwed up, the title company is going to have to pay out, on a lender’s policy and generally an owner’s policy too.

            The title company will have an obligation to its insureds (the lender for the foreclosure sale and/or purchaser under an owner’s policy) to defend against claims by the foreclosed parties that the foreclosure was fraudulent – so they will nominally be aligned with the foreclosing bank for that purpose. But the title insurance company is definitely going to be cross claiming against (and adverse to) the foreclosing bank to collect from the foreclosing bank if the sale is set aside and the title company has to pay on its policy(s). And if the foreclosing bank is also the lending bank for the foreclosure purchaser, the title company is going to be going after its own insured there too, claiming that the fraud of the insured as forecloser should prevent recovery by the insured as mortgage lender to the foreclosure purchaser.

            If I could draw pics, this would be easier to explain.

            At this point you need to have someone independent representing the needs of the buyer, bc everyone in the market has the same aligned interests

            The buyer in a foreclosure sale should have a lawyer. I think I misunderstood at first, since you were talking about legal aid lawyers representing the foreclosed persons, that you were concerned about someone representing their interests. I think both interests need to be represented, but the title company who writes title for a foreclosure BUYER can’t be aligned with the foreclosed party – they are by nature going to be adverse since the title company WILL be claiming that the foreclosure sale was valid if it wrote title for the buyer, but the title company with also be claiming against the foreclosing bank, filing and asserting that if the foreclosure sale wasn’t valid, then, in the alternative, the fraudulent forecloser owes the title company damages for anything the title company has to pay out under its policy.

            The foreclosed persons and the buyers at foreclosure both need to be represented by lawyers imo, but the duties are very different and not aligned. Foreclosed persons are going to be either trying to get the sale set aside, or to get money damages, because of fraud or irregularity. In part, a judge is the independent, neutral person who helps out the foreclosed party if their claim is valid.

            That judges is also going to be weighing the rights and interest of other parties too, in order to determine the remedy to apply. This is why I think you are more likely to see damages awarded than sales set aside, bc it is going to be hard to equitably deal with all interests. But still, in the end, it’s a judge who is the independent party resolving the issues, during and after the foreclosure. It’s the judge who’s say so – the foreclosure order – created the whole thing.

            At the foreclosure sale itself, if it is the buyer you are worried about, then the main thing you do is get a buyer’s title policy – which is the same thing you do if you exercise any kind of prudence with a non-foreclosure sale as well. What you won’t be able to do, though, is to swoop in and buy a home at a wildly reduced price (say get a 150,000 home for 50,000) and then, as purchaser, get the title company to insure for beyond your purchase price. So if you only pay 50,000 and the foreclosure sale is set aside to the point where you “lose title” then you won’t be able to collect more than what you paid for the house.

            Again, I don’t think this shit will be found unless someone has hte incentive to look at this in detail, which is mostly going to happen during a foreclosure, but that’s assuming the homeowner has enough legal support to do that work (which they don’t).

            This is more what I thought you were concerned about – the effect on the foreclosed party. I do agree something needs to be done for them, but it absolutely shouldn’t be on the backs of the title company writing title for the foreclosure purchaser to represent the homeowners interests – they are completely adverse. I think you have two real options here and, in some places, a third, and I also think that the fact that title insurers are going to demand that foreclosing banks give the title insurers affidavits will help the foreclosure paperwork be done correctly (which might not really help the foreclosed homeowner) even though that push is coming from the purchase side rather than the foreclosed person’s side.

            The first option to protect the homeowner is a lawyer and you’re right, they don’t have enough access and assets. That you have to address some other way than through the title companies, though, imo. You include a treble damages provision so more attorneys are willing to take the cases or something along those lines, or divert govt funding to more legal aid support, etc.

            The second option is the one that we are starting to see some, which is the state AG’s offices pursuing actions against lenders. This actually is more likely to get a better result, bc of the individual responsiblities on the line and bc these are not being done on a “home by home” basis, but are aggregating properties, which makes it a much bigger problem for the foreclosers – they can’t hope to have there be a “not enough money on the table to make it worthwhile” approach.

            The option available in some places is going to be the judges really cracking down on the foreclosers and their lawyers. Most banks can only appear in court through an attorney (until the Sup Ct changes that too via their personhood) and the attorney has duties to the court. If courts (esepcially where judges are elected and foreclosed persons have more votes than the banks doing the foreclosing) start a crack down, which I believe is happening in some places, then the banks will not be able to rush through foreclosures bc the lawyers will have too much on the line if the judge finds out about fraud later.

            Finally, I really think that the affidavits from the foreclosing banks to the title companies make it more likely that the foreclosing banks will clean up their paperwork too – the title company is also unlike an individual property owner with respect to its overall interest in what title it has written for foreclosed properties. If a bank is going to have a title company coming after it, bc the title company had to pay out on an owners or lenders policy, or both, that bank is facing a really different adversary than a foreclosed homeowner.

            again, fwiw

  6. PeasantParty says:

    The banks were doing all of this while knowing the homebuyers were going to lose their source of income too! They hold the corporate accounts and know that America economic structures were shipping offshore daily. It was all done on purpose!

  7. dude says:

    Fidelity bought up Chicago Title around 2000. Chicago Title was very active in my area (Charlotte) doing town-homes in new developments around 2003. MERS was part of many of those loans. Just an observation.

  8. Synoia says:

    In a Real Estate Transaction, the Title insurance companies typically sell two title policies.

    The first is typically paid by the seller to ensure clean title; the party (buyer or seller) that pays for the title insurance is negotiable. The second is required by the borrow to protect against encroachments and adverse possession claims which exist at the time of closing.

    In a REO sale (the bank sale of a foreclosed home) the buyer has the option of selecting any title company to provide clear title to the property. In the case of BofA’s REO sale BofA specifies that they, BofA will only pay for title insurance from Fidelity Title. The buyer is free to purchase title insurance from any other title company.

    Typically buyers do not take the election to pay for clear title. It is possible, but not common, for the buyer, in the purchase of the title policy required by the buyer’s lender, to choose a title company different from the sellers.

    • emptywheel says:

      I’m half tempted to fall in love w/a foreclosure to test this system. Because how much do you want to bet the industry leads you into Fidelity, basically saying “we can’t get this through in the next 45 days unless you go w/Fidelity.”

      And yes, if I do this, I fully intend to get my own title insurance from some other company. I’ll be emailing you for coaching, too, it looks like.

  9. CalGeorge says:

    “we have not found any evidence at this point of systemic issues in the underlying legal or other documents that have been reviewed.”

    Sounds like he learned to talk from Alan Greenspan.

  10. Rayne says:

    Ah, one more piece for the Fidelity timeline:

    24-NOV-2008 — President-elect Barack Obama announces his decision to nominate Timothy Geithner to Treasury Secretar. Geithner “played a supporting role to Henry Paulson, former CEO of Goldman Sachs, in the decision to bail out AIG just two days after deciding not to rescue Lehman Brothers from bankruptcy.” (source: Wikipedia)

  11. WilliamOckham says:

    Its been 10 years since I worked for a title company, but here’s what I think is important about this. Title companies do two things. They verify that the seller of the house is the actual owner. They verify that there are no outstanding liens. This agreement is all about the second thing (liens).

    On a foreclosed home, there is absolutely no doubt who the owner is. When you buy a house at a foreclosure sale, you own it. It doesn’t matter how much fraud was involved, a foreclosure is one of the only legal things that can’t be undone (that might change, but I think it is unlikely). This agreement gives the title company a little better legal footing to point the unrightfully dispossessed homeowners at the bank, but that was really already the case.

    Where this agreement really changes the game is in the area of liens. From the financial industry’s point of view, the real problem right now is that nobody is really sure who owns the outstanding loans on an existing property. Those things attach to the property, not the owner, so they survive a foreclosure. This agreement says to the banks, you guys have to fight that battle among yourselves. If the seller hasn’t tracked down all the possible owners of the loans (as opposed to the property itself), that’s their problem. In the old days, the title company would protect the new owner against that stuff. Now they want the banks who foreclosed to do that.

    If you are buying a foreclosed home, make very sure that your title insurance policy covers existing liens. The title company may make the banks cover that stuff, but it’s your title insurance policy that protects you.

    • Mary says:

      I’m not reading this the same way as you are. In most states, foreclosure orders and sales can be set aside for fraud in the proceedings. Now, the rights of a good faith purchaser without notice might enter into things, but once there is a foreclosure crisis that is being publicized to involve lender fraud, its harder to claim protections of being a good faith purchaser for value.

      My understanding is that it is, indeed, the actual OWNERSHIP (not just liens) that is the underlying issue.

      “Fidelity National Financial Inc., the largest U.S. title insurer by market share, will require lenders to sign a warranty assuring their paperwork is sound before backing sales of foreclosed homes.”

      Most foreclosure do actually affect the liens on the property.

      From the financial industry’s point of view, the real problem right now is that nobody is really sure who owns the outstanding loans on an existing property. Those things attach to the property, not the owner, so they survive a foreclosure.

      Generally, liens are being foreclosed with the foreclosure action. That’s why junior lienholder’s never bother to foreclose, only senior holders.

      IOW, let’s say the house has a first mortgage for 100,000, a second or equity for 20,000 and then as the homeowner was starting to go under, a credit card company gets a judgement lien for 10,000 that they record (making it a lien against the real estate in the county where the judgment is recorded) and a business vendor gets a judgement for 25,000 for bad business debt they personally guaranteed that the business lender records too.

      In a foreclosure action, all those lien holders are joined as parties bc their lien rights are going to be foreclosed out through the foreclosure sale. If the home is likely to bring 135,000 in a foreclosure sale, by the time the first mortgage holder adds up back interest owing and costs of litigation etc., the first mortgage holder is likely to get all the money, but ALL the liens are extinguished in the forclosure. If the junior holders want to protect their rights and think the property is worth it, they can “bid in” at the foreclosure sale. Won’t go into that here, but foreclosure does usually extinguish liens on the property.

      However, if the foreclosure is based on fraud, it can be set aside. I think that’s the big issue that is being addressed. Foreclosure funds can always be escrowed for determinations of who has the first and best rights to them (to address all the chopping and dicing of the mortage and note interests that have been at issue in the derivatives market).

      But in order to get to the foreclosure point, someone had to tell the judge that, for example, they have the original mortgage and note and they have the right to foreclose, etc. If, because of sloppy documents handling due to the slicing and dicing of interests, it’s not clear who really has the right to foreclose or the documents, and “someone” lied to the court, then the foreclosure action itself can be set aside. That undoes the vesting of title from the foreclosure sale itself(which has such a broad effect I can’t tell you how reluctant courts and financial markets and real estate interests etc. are going to be to arrive at that result).

      It’s true that foreclosure CAN give you some of the “best title” possible, but that’s because it forecloses out so many interests by court order. If the court order is obtained through fraud, though, and can be set aside – there’s huge big problems. If all this ends up being reduced to the courts saying the sales can’t be set aside, but only monetary damages can be obtained, that will be a) the expected result and b) make things a bit easier to address on an industry basis.

      OTOH, real estate has a unique status in law, and there is precedent for set asides instead of damages. But the likelihood that this is all going to be reduced to monetary damages is why, imo, title companies are willing to insure over and the very fact that they are getting title companies to insure over is going to help direct the result to monetary damages imo.

      Have to go and do real work for a couple of hourse and get ready for a meeting. Take all the above with a fwiw , since none of it is based on my real knowledge of the facts of the foreclosures at issue or the laws of the states of foreclosures, etc.

  12. qweryous says:

    I agree with your assessment of the Fidelity National policy.

    “…it cannot or will not adequately do that main part of its job: review the documents on a house and make sure the documents say what they appear to say. Instead of doing the forensics required to check that documentation (lawyers challenging foreclosures have proven fraud by showing notary stamps post-date the purported signing of the notarized document, comparing signatures to prove some are forgeries, and pointing to allonges not attached to the actual note, among other things) on every sale, they’re simply demanding that banks claim they don’t need to do that work.”

    Here is an analogy: Suppose that the banking system discovered that massive amounts of counterfeit bills were flooding the system, threatening its stability, and the economy as a whole. Would they call for retroactively making the counterfeits real by government and legal fiat?

    Going a little further, suppose that counterfeit checks, credit card transactions, and electronic deposits and withdrawals had suddenly become common. And that these were perpetrated from within the banking system rather than by outsiders from outside the system. How would the banks deal with such a situation?

    Banks use those special pens to determine whether the bill is counterfeit, keeping the system honest…making sure the customer bears the loss- even if the bill came from the bank..

    My analogy just ran off the rails. What would occur is that the crooked insiders would use their stolen capital to expand their sphere of influence, either buying or running the honest banks out of the business. Using the political and legal system, they would by fiat make it impossible for honest competitors to remain in the business.

    Now as EW posits above the title insurance industry does not want to; and as it is currently constituted CAN NOT properly distinguish the true and honest from the fake and based upon lies. Mostly because they are paid not to,and not paid to. In addition, the real estate and mortgage industry itself has been the counterfeiter and false testifier. In this case the title insurance industry would need to report that the customer, the sole source of business; and in most cases, the owner, is the crook…report this to…Mr. Look Forward and Lieutenant Extend and Pretend.

    If it is looked at on a mortgage by mortgage basis, who will bear the costs to rectify the faults and reconstruct a correct record for the property in question?

    The costs to truly sort all the bad records out of the system and to reconstitute a functioning system are large. In order that some validity can be assigned to affidavits and sworn testimony, punishment must be administered to those who essentially lied. (Some punishment for the fraud and theft at the next level up from the initial deception would also be productive). This must be done or property ownership rights will revert to “he said, she said” ala banana republic.

    Step one to the solution- clearly define and admit the extent of the problem. Still waiting.

  13. Mary says:

    I’m not immersed in the foreclosure fraud crisis but I am pretty well versed on title insurance and from what little I’ve read from the excerpts here and there, I don’t see this in the same way.

    Title insurance is available to owners as well as lenders. Often, owners may not be sophisticated enough to ask for it, but most realtors will steer them if they don’t think about it. So in a typical transaction, where a buyer is getting a loan for a property, the lender will require that the borrower purchase title insurance for the benefit of the lender, where the premium will be based in part on the size of the mortgage. Most owners will also request and get an owner’s policy with that premium based on the purchase price – but most title insurers will give the owner something called a simultaneous issue rate so that they pay a much reduced price since the loan amount has already been insured over in the lender’s policy.

    I can’t really do justice in the amount of time I have, but once upon a time real estate transactions didn’t close on title insurance, they closed on opinions of real estate counsel and certificates of title and the like. All of those processes (including modern title insurance) involved a lot of work reviewing the actual “record title” of property, to make sure that there was a clean “chain of title.” The problem is/was that there are a lot of things that can impact title other than chaining out title.

    For example, there can be a clean record “chain” for blackacre from Mr. A to Mrs. B to Ms C, and yet Ms C might not get clear title from Mrs. B. This might be because of patent defects or latent defects. A patent defect would be one obvious from a review of the documents (misspelled names, Mrs. x y B conveying as Mrs. x [no y] B, typos on dates or subscriptions or notary dates post-dating signature dates etc.) A latent defect would typically be something like a forged signature (Mrs. B is really in a nursing home and her daughter pretends to be her and sells the house) or something like Mrs. B claiming to be a widow with sole rights of survivorship in the property, when instead her husband is doing time for FISA felonies.

    There are also other things that might affect either or both of title to the property or the right to use property for its intended purpose. For example, Mrs. B might have had work done to the property and have not paid the workers – for a period of time those workers might have a right to file a lien on the property (mechanics lien). So 20,000 in repairs/renovations recently completed is owing when Mrs. B sells to Ms. C, the mechanics liens against the property might not show up until a month after closing. Also, Mrs. B might have entered into an unrecorded lease of the house to Tenant T and under state laws, Tenant T might have the rights of a “party in possession” under state law and Ms. C might not be able to move into “her” house (or even get the rent, depending on things) until after, for example, lease expiration.

    Also, Ms C might be looking at her lovely back yard with a beautiful hand crafted stone and wrought iron fence all around it (part of the 20,000 in mechanics liens that are getting ready to be filed) – except that this fence isn’t really on property line. Maybe she owns another 100 feet beyond, maybe she’s encroached on her neighbor’s property, maybe she’s violated a county setback ordinance. No amount of “public records” review or even fraud protection with help with that – you need surveys.

    Enter title insurance. It provided a way for owners – but more importantly for lenders who were going to be in the business of loaning against lots of properties – to shift the risk of some or all of these problems to a third party. As a matter of pragmatism, it already takes a lot of time and money to do a full, back to land patent, public records search. No one is going to be able to add the full costs of outright investigations into rights of parties in possessions, possible mechanics liens issues, investigations of identies and signing rights for all persons in the chain, etc. without adding tens of thousands to closing costs.

    However, some of these things don’t happen that frequently and can be greatly reduced by a few kinds of precautions. So the title insurers have standards for possible (but not deemed likely) defects that they will “insure over” (things where no one knows for sure that everything is all right – like fraud in the chain) and things for which they will take exceptions (not provide insurance for that item) or where they will insure over their exceptions based on other documentation (for example, they might not insure over rights of parties in possession in general, but if the seller signs off on an affidavit regarding rights of parties in possession, the title company may insure against rights of parties in possession or the title company may not provide boundary line insurance, but with a survey or if the property is in a platted subdivision, they might insure for that).

    The fact that the title insurance company would insure for fraud defects in title and take an affidavit from Mrs. B that no one has possessory rights in blackacre and provide boundary insurance, etc. HUGELY facilitates the residential real estate market here in the states. Lenders can loan, purchasers can GET a loan, etc. all more freely and much more economically and with less risk.

    Note that when the insurance company insures over defects for something like fraud in the chain, they assume that risk and have a very iffy route of recovery (the daughter who pretended to be Mrs B may be hard to find, have no assets, and more importantly didn’t have direct privity with the insurer). Similarly, when the insurer insures over a possible defect based on an affidavit (for example, Mrs. B’s rights of parties in possession affidavit) the insurance company is still assuming the risk for that difect, but now has a more direct right against the affiant.

    This means that the lender with title insurance (and the owner if they got a simultaneous issue owner’s policy) gets paid by the title insurance company for losses from defects, and the title insurance company has to pursue the party who committed the fraud in the chain or the giver of the affidavit for recovery.

    In this foreclosure crisis, a lot of the sellers are not Mrs B, they are Foreclosing Bank B. If no one will loan to purchasers who want to buy foreclosed properties, the problem is going to get worse. But if title insurance companies won’t insure over foreclosure defects because it is public knowledge that those defects may be very widespread and in many cases, latent or even legally uncertain, then buyers are going to have a harder time.

    Latent defects in a foreclosure property might include, for example, the robosigning issue. That might mean that the foreclosure affidavits given to the courts (not filed in the real estate records), where the affiant says they have care and custody of the documents, know the history, personally reviewed everything, etc., may be fraudulent affidavits, but there is no way to tell from just looking at the foreclosure affidavit and without delving more deeply – sometimes much more deeply (and expensively).

    In addition to discovering the fraud in the affidavit, typically a court order of foreclosure would supercede any objections to the fraudulent affidavit not raised in the foreclosure proceedings, so the effect of the fraud is also going to be an unknown where objections were not time raised (i.e., is there a right that affects the property, or only a right of recovery for money damages against the fraud perpetrators or only a right based on material fraud and what will be the standards for materiality if the mortagee is in default, and will it be different if there is a deed of trust v. a mortgage etc.)

    So it seems to me that this is just a fairly prudent approach. On the one hand, it will facilitate the abiilty to sell properties that are the subject of foreclosure and there are some arguments to be made that moving already foreclosed upon properties should be slowed down with efforts to put the foreclosed persons back in the homes, but there are some equally or more so compelling arguments that the ability to sell homes that have already been the subject of court orders is pretty necessary to keep the market from further collapse.

    The title insurer is still going to bear a risk of loss if they get the affidavits from foreclosing entities. It’s just that the insurer will go ahead and pay off under lenders’ and owners’ policies and be the entity to pursue the forclosing bank/title insurance affiant. In some ways, this makes a lot of sense, bc the title insurer is the entity likely to have accumulated claims against the forecloser who is giving multiple affidavits for multiple property and those accumlated claims should make pursuit of legal claims more efficient and pit the party (the insurer) with the most vested interest and relatively deep pockets directly against the foreclosing lender.

    A title insurer is going to have more clout to go against the foreclosing banks for their defects than an assortment of individual purchasers and lending banks. I think there’s an argument that the foreclosers having to provide direct affidavits to the title companies is likely to get them to clean up their acts more, and with less damage to some already hard hit markets, than if no title company will write title on foreclosure transactions and even purchasers who didn’t purchase owners policies are going to benefit if foreclosers know that a title company that may get bit on transactions involving lots of different lending banks is going to be coming after them.

    I also don’t think there’s any disincentive from a forclosers affidavit for title companies to try to identify patent defects (like post-dated notaries – although in many of those instances those defects might be litigation defects in the court proceeding, that are typically merged into the court order if not appealed or raised in the foreclosure proceeding) because the title company is still on the hook to the lending insurer and will have to try to recover from the forecloser.

    I don’t really think that title companies are going to be “doing less” than if they hadn’t come up with the affidavit option. Title companies in general would never have a duty to examine all the underlying details of a piece of foreclosure litigation (including affidavits given in that litigation) because that is the function of the court in that litigation – they would normally only be responsible for a review of the court order and appeals periods.

    If the title companies were somehow goign to be charged with undertaking the responsiblity for being the entity to review the litigation proceedings for regularity and lack of fraud or latent defects and insure that regularity directly, it would add thousands and thousands to closing costs for a foreclosure property if you could even get a title company to do it. Most just wouldn’t write title for foreclosures (they don’t have any duty to provide that insurance), so foreclosed properties would have that many more problems getting a lender to loan for their purchase.

    Now, while argument can be made that “well, fine, that’ll teach those foreclosing banks, especially the ones that had fraud, those properties will just sit and sit, with the owners kicked out and no one able to get a loan to buy” there are a lot of problems with that as well. For one thing, more prior owners of foreclosed properties are going to look at bankruptcy, since they typically have liability under their notes for all expenses, including carrying costs and foreclosure costs and those costs will just continue to mount. Empty properties attract vandalism and batter surrounding property values and lenders who have foreclosed property that can’t be moved are going to be causing a really big impact in the markets and vis a vis their own investors and even at times account holders.

    I do think banks should have their feet held to the fire over foreclosure fraud but I’m not sure that clouding or halting the ability to allow for the transfer of forelosed properties where no appeals are pending to new purchasers is the most productive route and I think the affidavit process the title insurer is seeking may facilitate the process and put an entity with a vested interest to reduce title fraud in general and with a broad enough exposure and deep enough pockets into a position where it can now directly pressure foreclosers.

    longwinded fwiw.

    • qweryous says:

      longwinded fwiw.

      IMO- Please continue to be longwinded on any subject you choose.
      It may seem long to you- but to me there is a lot there.

      I made the time to read it, and will come back to it later.

      Thanks for the kind words EW and mzchief

      An interesting link I came across.

      Words of Advice for Anyone Who Cares to Listen” Copyright 2006 by E.C. Rybczynski

      From the introduction:

      “I am a title abstractor who works regularly in Baltimore City and a couple of other counties. It may seem that this white paper is self serving, but there’s more to the story. I am genuinely concerned about those of you who are well intended and believe that accurate information is easily obtained on-line. Greater still are my concerns about the confidence of the consumer and the lasting effect that an unanticipated wave of title claims could have on Maryland’s title industry. “

      Read through this and wonder how many employed in the title industry can even read and comprehend the document, much less perform the job correctly.

      I just realized that I failed to include a reference to William K. Black
      in my @33. Fixing that here.

    • scribe says:

      +10, Mary.

      Now, for my take on this – from a slightly different angle.

      There’s something more subtle EW and the other commenters are missing. The issue comes down to MERS having fucked up the land recording system so thoroughly that title insurers are looking at the banks (the patrons/members/owners of MERS) to indemnify the title insurers because the title insurers cannot be sure the titles they pull from the recording system are, in fact, insurable.

      To make generic the real estae closingprocess, which varies widely from state to state and sometimes even within a single state, it works like this.

      A buyer and seller get together to transfer a piece of realty. Depending on the practice in the particular state, either one of the party’s attorneys (if attorneys do residential real estate closings in that state) or the realtor/closing agent (if attorneys don’t) goes to the title insurer to get the title insurance policy because no (sane) bank will give a mortgage without the title being insured.

      In short, the bank wants to know that its collateral for the loan – the mortgage – will be there and at full value in the event they need to go after it. Remember, the mortgage is the promise the turns the property into collateral for the loan.

      The title insurer has a bunch of title searchers (usually, they are independent contractors) who work out of the land records room down at the county. They get the description of the property – address, lot and block on the tax map, owner’s name – and pull the title. They go bak a certain amount of time in their search. Sometimes it’s just to the last closing on the property. In a state where I practiced, they would go back at most 60 years (this comes into play with those WWII vets who came home, bought a house, never moved and are only now dying off) because that was the longest statute of limitations that could affect a land title – but the length of time varies from state to state.

      Anyway, the title searcher would report on the state of the title – all the liens on the property, all the mortgages, everything. This would come back to the title insurer and after analyzing this they would tell the closing agent (either the attorney, in those states where attorneys do closings, or the closer, in those with non-lawyer closings) what the title insurer deemed to be defects in the title and liens which had to be cleared in order for them to deem the title insurable and issue the policy. Some of the liens – like the old mortgage or an IRS lien – are easy to clear. You promise to pay the existing mortgage out of the proceeds of the sale or promise to reserve enough in the attorney’s trust account to pay the IRS lien plus the continually accruing interest. (Those who make such promises and break them usually only get to do so once, before they find John Law knocking on their door. Title insurers are not shy about calling the cops.)

      Some liens are not so easy to clear and may actually require a suit to “quiet title”. No point in going too far into detail, but divergent surveyor reports or boundary disputes (unlikely now especially in planned developments, but more likely in the past or in very rural areas) are guaranteed to cause trouble.

      Anyway, when you get all the liens cleared and exceptions (what the title insurer calls these issues) resolved, only then will they commit to issuing a title policy. That is not the end for the title searcher. On the day of the closing, the title searcher will be asked to do what was called a “rundown” in my state. In short, the rundown was a quick review of the title records down at the county to make sure no one has slapped a new or previously unknown lien on the property since the main search was done. If the rundown comes back clear, the closing can go forward.

      What MERS has done is make it almost impossible to know from the public records what mortgage liens might be lurking out there and, perhaps more importantly, which of them are actually valid and binding on the property and which have been so fucked up as to sever the mortgage from the note. Remember, mortgages which have been severed from the note (or which can be severed from the note) are just worthless pieces of paper and not collateral for the note. Title searchers cannot give a definitive answer when they do their searches as to which are and which are not valid. That is not their job; they are not lawyers. Moreover, determining which are valid is something done only in the context of a judicial proceeding – a lawsuit. The potential invalidity of alleged mortgage liens is something which will have to be judicially determined in every case.

      So, what the title insurers are doing is looking to the people who caused this mess – the banks, with their MERS monster – to pay the freight for fucking up the land recording system. And this freight gets paid by the title insurer holding the gun of “we won’t issue title policies on foreclosed properties being sold unless you indemnify us, and leave you stuck with this inventory of unsalable properties” to the banks’ heads.

      Actually, this is not necessarily a bad deal all around. While digging out the fraud and putting the fraudsters in jail is a worthy goal, keeping a floor under the real estate market is too.

      • Rayne says:

        The issue comes down to MERS having fucked up the land recording system so thoroughly that title insurers are looking at the banks (the patrons/members/owners of MERS) to indemnify the title insurers because the title insurers cannot be sure the titles they pull from the recording system are, in fact, insurable.

        Exactly, because MERS = The Banks.

  14. Arbusto says:

    And the lenders are, as often as not, the same servicers that are trying to unload these properties.

    I can’t state it’s the case now, but in the past, regulations proscribed lenders from financing their OREO properties. Conflict of interest, don’t you know.

    As to the escrow process (may only apply to trust deed States?) the escrow is held by and in the title company’s office. They are less than likely to offer or encourage or allow borrowers other title insurance than their own. How many buyers take the time to read and understand the escrow documents, closing costs, title insurance and fine print by lenders and title companies, when all they want is their new house. Looks like there may be a plethora of new real estate attorneys that prudent buyers may need to employ.

    • emptywheel says:

      YEah, and I mean that figuratively anyway. Wells is not lending $$ to buy a house currently serviced by Wells, per se. But they are lending $$ to buy a house serviced by BoA, which is in turn lending $$ to buy a house serviced by Wells.

      WHoever it was that said we need a holiday to first cancel off the debts these banksters owe to each other was right on the money.

      Cancel all their debts, then get them out of the way.

  15. BoxTurtle says:

    I can’t really do justice in the amount of time I have

    Yeah, right. Longest post of the day and arguably the most informative.

    Boxturtle (It will take me longer to grok it that it took you to write it)

  16. oldtree says:

    If you have anything to do with Fidelity, ask them questions on the phone about your property. They absorbed a lot of little title companies that were named by many “mortgage brokers” as the title company that a client had to use, capturing the contract, a violation of law. The Feds made many of these “little title co’s” cease operations. Why would Fidelity absorb an entity forced out of business for violations of law. They also may be named on your promissory note as the beneficiary, if so, Get your HUD and FDCPA requests in now or they are going to go under without naming the creditor. One day they claimed to own the PM, the next day they don’t. Anyone with Fidelity on your note may want to get an attorney while they are still in operation.
    I mention this because you have to ask them. Not that they will answer. No large lenders answer any required requests under consumer protection laws. Only the smaller servicers or purported “lenders” are answering these, because they can’t afford to drop more bricks on the office carpet. Once everyone realizes a loan more than 4 or so years old has about a 10% chance of being legitimate or collectible, we may get the middle class back. Then we have to begin helping all of our neighbors get their homes back.
    Your loan has been paid folks. Go on that assumption and work backward. Look at your documents. If MERS is on the documents recorded, in many states it appears to void the loan. That means no one can collect from you if you choose to fight. I work in this area, and I will not put links to the sites that will help you because all the work uncovering this is being done here by Marcy, or over at Neil’s place, or the folks in Florida that found the documents being used their, the Florida attorney’s that have been screaming murder about this for 4 years.
    This is the only story there is right now, it will mean our republic.

  17. zaphod says:

    I’d just clarify something that’s contained in Mary’s excellent explication of title insurance, but which perhaps deserves its own point, which is that Fidelity is not purporting to change ANYTHING regarding a title insurer’s obligation.

    It’s just requiring lenders to provide an indemnfication against their own possible bad acts that might have *created* a title problem, which arguably the lender would be responsible for anyway, if the insurer later had to pay out due to bogus affidavits, etc. causing a problem.

    One distinction that’s important is that title insurance is not a gurantee of perfect title, and never was. It’s an indemnification against loss. The policies simply say that if there is a title problem, the insurer will fix it, or pay damages. There’s no obligation to comb through the title and ensure that it’s perfect, because if it’s not (and the problem causes a loss) it’s insurer’s problem, not the insured’s.

    All Fidelity’s doing here is requiring the lender to affirm that it takes responsibility for any issues it MIGHT have caused by its bad acts, which again, the lender would be responsible for anyway, given that they typically convey after taking title in foreclosure by Special Warranty Deed, which promises the buyer that the seller (here, the foreclosing lender) has not done anything to damage the title. Fraudulent conduct in a foreclosure leading would seem to qualify under that warranty anyway.

  18. nextstopchicago says:

    A similar sleight of hand for the nostalgic among us. Anybody remember that old term “credit card fraud.” You know, when somebody stole a credit card, or a credit card number, and then passed themselves off as you in order to steal from the credit card company. The crime now known as identity theft, as if they’re stealing from you, and not from the credit card company (paraphrasing Marcey) who are now unwilling to do their primary duty of making sure the person asking for credit is really the person they say they are.

    I think someone could sue visa and mastercard after an identity theft, arguing that since neither merchant nor card company had verified a signature, the problem was entirely theirs, and any attempt to put anything at all on the “identity theft victim’s” credit report amounted to libel.

  19. rosalind says:

    (Trash Talk OT: Pac-10 announces split into North-South divisions for new 12-school alignment)

    The South will feature USC, UCLA, Arizona, Arizona State and the two newcomers — Colorado and Utah.

    The North division will be Stanford, Cal, Oregon, Oregon State, Washington and Washington State.

    USC and UCLA fought, and won, to keep Cal and Stanford on their annual schedule…The Oregon and Washington schools will now play in Los Angeles every other year.

  20. klynn says:

    And looks more like an incentivized shotgun marriage; the Hart-Scott-Rodino period should have been tweaked/reset/modified if there were such complications, don’t you think? Instead it smells more like another Bear Stearns event.

    If it is, wonder why the investors bit? It does not make sense unless there was an incentive.

  21. brighton says:

    My understanding is that it is, indeed, the actual OWNERSHIP (not just liens) that is the underlying issue.

    Agreed – whether it is a mortgage, deed of trust, or security deed, every secured home loan has an instrument resembling a promissory note and an instrument conveying a security interest in the real property. In order to foreclose, a valid written assignment of the rights granted the lender to enforce the latter upon default of the former is necessary. I’ve never seen an important loan document that could be assigned verbally or after the fact. You need a paper trail to prove title and that’s where the problem lies.
    Read here for a People’s Guide to Foreclosures and Fraud

  22. behindthefall says:

    Who is this Mary person anyway … ? Deep Thought or the computer with a brain the size of a planet? (Sorry. The Hitchhiker’s Guide just insisted on popping up.)

  23. earlofhuntingdon says:

    I would add that homeowners certainly do want title insurance to protect them and not just their lender. The phrase, “all standard exceptions removed”, once common and typically available coverage, if asked for, may well become unavailable.

  24. earlofhuntingdon says:

    This shitpile will haunt homeowners for a generation. What sort of deed will a homeowner responsibly be able to provide if the title company and bank documents they acquired with their “title” are inherently faulty, if for no other reason than the title company chose not to perform the due diligence which is really their only service.

    This seems, obviously, like another attempt by the haves to shift the risk of their reckless gambling for profits onto the backs of middle Americans. When will Americans learn to say, “C’est tout!”, an observation prompted by a comment from a French activist protesting Sarkozy’s attempts to reform pensions by making them less valuable. The final vote on Sarkozy’s reforms coming this week in the French Senate that activist considered less important than whether insistent, peaceful street protests made it a practical nullity.

    • scribe says:

      It’s not necessarily that the title insurers won’t do their work. It’s as much that, because of MERS, they can’t. They cannot tell from the public records what the state of the title is.