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Title Companies Asking For Reassurance from "Robo-Signing" Lenders
In addition to satisfying federal and state regulators that they're following the letter of the law, lenders embroiled in the "robo signing" scandal may soon have to provide warranties to title insurers in order to continue selling foreclosed homes.
Bank of America has already agreed to provide warranties to Fidelity National Financial Inc. that cover the title insurer's costs if employees processing foreclosure documents for the bank make mistakes, Bloomberg News reports, and is in talks with other title insurers to do the same.
Bank of America announced Friday that it would temporarily halt foreclosure sales in all 50 states until it completed a review of its foreclosure procedures, which so far "shows the basis for foreclosure decisions is accurate."
At least four other loan servicers have slowed or halted some foreclosure proceedings in 23 judicial foreclosure states, following allegations that employees handling court filings for the companies signed affidavits that contained information they had not personally verified.Other loan servicers taking action, to date, are GMAC Mortgage, JP Morgan Chase, PNC Financial Services Group Inc. and Litton Loan Servicing.
In addition to mollifying state and federal officials, lenders that want to sell properties they have foreclosed must also convince title insurers they have followed the proper procedures.
ALTA, the title insurance industry's trade group, continues to maintain that flaws in documentation filed in the foreclosure process should ultimately have little adverse impact on buyers of "real estate owned" (also known as bank-owned or REO) properties or on title insurance claims.
Old Republic National Title Insurance Co. has reportedly stopped insuring title for properties foreclosed on by JP Morgan Chase and GMAC Mortgage. The Associated Press reported Friday that Stewart Title Guaranty Co. has issued guidelines to agents that include restrictions on insuring title for properties foreclosed on by JP Morgan Chase, Bank of America, OneWest Bank and GMAC Mortgage.
In arguing against a foreclosure moratorium, Peter Swire, an Ohio State University law professor who until August was a special assistant to President Obama for economic policy, said senior corporate officers at banks should instead personally certify that they have checked their internal foreclosure processes.
The scope of such certifications could vary, based on the what the senior bank official can actually promise, Swire said.
The Mortgage Electronic Registration Systems, or MERS, saved financial firms hundreds of millions of dollars by reducing paperwork involved with reassigning loans, the Washington Post reports. "If you read nothing else," Pfotenhauer advised, "check out MERS's response to speculation about their role in the foreclosure process."
Bank of America has already agreed to provide warranties to Fidelity National Financial Inc. that cover the title insurer's costs if employees processing foreclosure documents for the bank make mistakes, Bloomberg News reports, and is in talks with other title insurers to do the same.
Bank of America announced Friday that it would temporarily halt foreclosure sales in all 50 states until it completed a review of its foreclosure procedures, which so far "shows the basis for foreclosure decisions is accurate."
At least four other loan servicers have slowed or halted some foreclosure proceedings in 23 judicial foreclosure states, following allegations that employees handling court filings for the companies signed affidavits that contained information they had not personally verified.Other loan servicers taking action, to date, are GMAC Mortgage, JP Morgan Chase, PNC Financial Services Group Inc. and Litton Loan Servicing.
In addition to mollifying state and federal officials, lenders that want to sell properties they have foreclosed must also convince title insurers they have followed the proper procedures.
ALTA, the title insurance industry's trade group, continues to maintain that flaws in documentation filed in the foreclosure process should ultimately have little adverse impact on buyers of "real estate owned" (also known as bank-owned or REO) properties or on title insurance claims.
Old Republic National Title Insurance Co. has reportedly stopped insuring title for properties foreclosed on by JP Morgan Chase and GMAC Mortgage. The Associated Press reported Friday that Stewart Title Guaranty Co. has issued guidelines to agents that include restrictions on insuring title for properties foreclosed on by JP Morgan Chase, Bank of America, OneWest Bank and GMAC Mortgage.
In arguing against a foreclosure moratorium, Peter Swire, an Ohio State University law professor who until August was a special assistant to President Obama for economic policy, said senior corporate officers at banks should instead personally certify that they have checked their internal foreclosure processes.
The scope of such certifications could vary, based on the what the senior bank official can actually promise, Swire said.
The Mortgage Electronic Registration Systems, or MERS, saved financial firms hundreds of millions of dollars by reducing paperwork involved with reassigning loans, the Washington Post reports. "If you read nothing else," Pfotenhauer advised, "check out MERS's response to speculation about their role in the foreclosure process."
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