Old Republic National Title, one of the country’s largest title insurance companies announced that it won’t insure homes that have been foreclosed on by J.P. Morgan Chase.

The New York Times obtained a company memo that said Old Republic would not write policies on foreclosed Chase properties until “objectionable issues have been resolved.” Earlier last week, the company said it would not write title policies for homes that had been foreclosed by GMAC mortgage, which is now owned by Ally Bank.

Late last week Bank of America said it would also freeze foreclosures in certain states while it reconfirmed that the foreclosure documents had been prepared and executed correctly. It’s likely that Old Republic will stop writing title policies on these foreclosures as well.

If other major title companies follow suit, and stop writing these policies, it could turn into the watershed event that actually sends the already crippled housing market into a tailspin.

Why? Let’s back up for a moment.

Title is the ownership in a property. A chain of title is a list of all owners in the property going back to when the land was first developed or, in the case of some East Coast properties, when the King of England first granted large tracts of land to homeowners.