Sociable

Sunday, October 3, 2010

Company Stops Insuring Titles in Chase Foreclosures

More fall out from the paper mill news.  This some of the short time affects.
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.
A Chase spokesman declined to comment. Old Republic executives did not return calls for comment. The title insurer, which is based in Minneapolis, said earlier in the week that it would not write policies for properties that had been foreclosed by another big lender, GMAC Mortgage.
Now, this next paragraph, I believe hints at future legal issues or even class actions between title insurance and banks, but probably the banks will need to hire staff to properly handle both the documents and the transactions.
When foreclosures are done with faulty documentation, that could leave the new owners of the house vulnerable to claims. Title insurance protects the buyer against defects, errors or omissions in the chain of title.
“Judges have to force banks to do foreclosures correctly,” Mr. Stopa said. But that would require a significant increase in staff, he said, and “I’ll believe it when I see it.”

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