Have you ever heard of anyone collecting title insurance? Perhaps none; yet if you are going to buy a home or refinance a mortgage, a title insurance gets the largest chunk in the itemized estimate for closing costs and fees. Though most home buyers and refinancers don’t bother to question this anymore because of the tiresome process of asking and shopping for better insurance providers, the recent buzz on foreclosure freezing by some banks and mortgage providers bring to light the immense importance of title insurance.

A title insurance is supposed to cover a home buyer from cases wherein other people turn up after the house has been bought and claims rights to the house. Title insurance providers run a title search and sift through government filings related to the property prior to it being bought to lower the chances of insurance being claimed later on. But if the insurers miss something and someone else do turn up later on, insurers would have to provide legal counsel or settle with whoever is claiming.

Sounds like title insurers are indeed champions of home buyers and refinancers, right? Not really; the truth is, they are more concerned about lenders, real estate agents, and lawyers who can give them more business. Though kicking back money from companies and brokers who send insurers business is technically not allowed, there’s nothing much everybody can do since title insurance is required if there’s mortgage involved.

The stop foreclosure message seems to have taken hold in light of the recent hoopla surrounding the “robo signing” mess created by mortgage lenders who have been caught red handed filing bogus and fraudulent affidavits in order to steamroll over distressed homeowners and take their homes through foreclosures that are in many cases illegal.

Major mortgage holders who have been very active in their bank foreclosure departments have now brought home foreclosures to a halt. J.P. Morgan Chase, GMAC and Bank of America, among others are leading the way in a massive foreclosure stoppage across America. Chase and GMAC have stopped foreclosures in 23 states. Bank of America in response to increasing pressure from congressional inquiry and court cases has now announced it is stopping home foreclosures in all 50 states. It is only a matter of time that other lenders will follow suit.

Posted via email from Title Insurance
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American Land Title Association Supports FHFA’s Policy Framework for Resolving Potential Foreclosure Process Deficiencies

October 14, 2010 admin

ALTA NEWS

Contact: Jeremy Yohe

Office: 202-261-2938

Phone: 202-590-8361
E-mail: jyohe@alta.org

Immediate Release

American Land Title Association Supports FHFA’s Policy Framework for Resolving Potential Foreclosure Process Deficiencies

Washington, D.C., Oct. 13, 2010 — The American Land Title Association (ALTA) supports the Federal Housing Finance Agency’s (FHFA) four-point policy framework for resolving potential foreclosure process deficiencies.

This framework will assist the land title industry to continue insuring Real Estate Owned (REO) properties based upon companies’ individual risk assessments.

“ALTA supports FHFA’s outline for an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, markets and other stakeholders,” said Kurt Pfotenhauer, chief executive officer of ALTA.

With respect to the clearing of title for REO properties, FHFA’s blueprint requires mortgage servicers to review their processes and procedures and verify that their documents, including affidavits and verifications, are completed according to legal requirements. When a foreclosure process deficiency is identified, it should be remediated. The FHFA directs mortgage servicers to address any issue and take actions as may be required to ensure that title insurance is available to the purchaser of the property.

“Title insurers are looking to lenders to provide appropriate indemnities,” Pfotenhauer said. “We will continue to work with federal and state regulators, Fannie Mae, Freddie Mac and lenders to bring certainty to the marketplace, and we will continue to offer the title industry’s perspective on this issue.”

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About ALTA

The American Land Title Association, founded in 1907, is a national trade association representing more than 3,800 title insurance companies, title agents, independent abstracters, title searchers, and attorneys. With offices throughout the United States, ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.