** Immediate Release **
American Land Title Association Comments on Recent Announcements Regarding the Foreclosure Process
Washington, D.C., Oct. 1, 2010 — The American Land Title Association (ALTA) has issued the following statement regarding title insurance on foreclosed properties:
Several lenders have halted foreclosures and the sale of real estate owned properties (REO) due to possible flaws in documentation used in the foreclosure process. This has, in turn, raised questions about the validity of title to properties that have already been foreclosed, resold and on which a title insurance policy has been issued. ALTA believes these questionable foreclosures will ultimately have little adverse impact on the new owners of REO properties or on the title insurance claims.
“If a new homeowner’s title is challenged because of a faulty foreclosure, the title insurer may have an obligation to defend the challenge,” said Kurt Pfotenhauer, chief executive officer of ALTA. “However, it is unlikely that a court will take property from an innocent current homeowner and return it to a previous homeowner who failed to make payments on the loan subject to the foreclosure.”
Though laws may vary on a state by state basis, in general, the buyer of a property that has been through foreclosure has numerous defenses available to assure their continued ownership.
- The alleged deficiency in the foreclosure process may not be accurate.
- The alleged deficiency in the foreclosure process may not have harmed the previous owner.
- The foreclosure judgment is a final court order. It is likely too late for a technical objection to the foreclosure process to be raised by the previous owner.
- Because the new owner purchased in good faith, they may be protected under the law.
These same legal defenses should significantly limit the title industry’s claims exposure. And in the event that a court does set aside a foreclosure due to a defect in documentation, the foreclosing lender would be required to return to the new homeowner all funds obtained from them, resulting in no loss under the title insurance policy.
“ALTA will be asking lenders to acknowledge that all appropriate procedures have been followed by the lending community before foreclosed properties are resold on the market,” Pfotenhauer said. “On foreclosures, it is especially important that all documentation is in order. Commitment to accuracy and quality assurance is the foundation of title insurance. This commitment ensures fewer problems for homeowners and lenders, and should give shareholders confidence in their investment.”
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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.
Jeremy Yohe | Director of Communications | American Land Title Association | 1828 L St N.W., #705 | Washington, DC. 20036| Ph: (202) 261-2938 | Fax: (202) 223-5843 / (888) FAX-ALTA (239-2582)
Visit ALTA online at www.alta.org for news and resources for the Title Industry.
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Manchester Grand Hyatt
San Diego, Calif.
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American Land Title Association Applauds U.S. Representatives for Introducing Bill Protecting Consumers from Harmful Private Transfer Fees
** Immediate Release **
American Land Title Association Applauds U.S. Representatives for Introducing Bill Protecting Consumers from Harmful Private Transfer Fees
Washington, D.C., Sept. 29, 2010 — The American Land Title Association applauds U.S. Rep. Maxine Walters and co-sponsors Gwen Moore, Brad Sherman and Albio Sires for introducing a bill that protects consumers from a harmful real estate scheme that strips homeowners of equity in their house and depresses home prices.
Known as the Homeowner Equity Protection Act, HR 6260 would amend the Real Estate Settlement Procedures Act (RESPA) to prohibit the collection of private transfer fees by for-profit third parties on all federally related mortgage loans. When a private transfer fee is placed on a property, it requires that every time the property is sold for the next 99 years, 1 percent of the sale price of the property must be paid to an independent third party.
“We congratulate Rep. Walters and the co-sponsors for introducing this much-needed, consumer-protection bill,” said Kurt Pfotenhauer, chief executive officer of ALTA. “While traditional covenants have an accepted and beneficial role in the housing market by benefitting the land, these predatory instruments steal equity from American homeowners forcing them to pay a premium for the right to sell their own property.”
The use of private transfer fees has already been restricted in 18 states, while the Federal Housing Authority has already confirmed that the government won’t insure mortgages backed by homes with private transfer fee covenants attached. The Federal Housing Finance Administration has issued a guidance that would restrict Fannie Mae, Freddie Mac, and the Federal Home Loan Banks from investing in mortgages with these fees.
“Since RESPA is a consumer protection statute, this amendment makes perfect sense to ban these fees because they add no benefit or value to a property, and are little more than a predatory scheme meant to take advantage of unsuspecting homeowners,” Pfotenhauer said. “ALTA thanks the representatives for recognizing the danger that these fees pose to homeowners and the real estate market.”
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About ALTA
The American Land Title Association, founded in 1907, is a national trade association representing 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.
Jeremy Yohe | Director of Communications | American Land Title Association | 1828 L St N.W., #705 | Washington, DC. 20036| Ph: (202) 261-2938 | Fax: (202) 223-5843 / (888) FAX-ALTA (239-2582)
Visit ALTA online at www.alta.org for news and resources for the Title Industry.
2010 Annual Convention
Oct. 13–16
Manchester Grand Hyatt
San Diego, Calif.
Continuing Education for Title Agents
Free classifieds for the Title Industry
Posted via email from Title Insurance
Continuing Ed for Title Agents
Report: Don’t give up on ‘nonprime’ lending | Inman News
Harvard researchers make a case for government’s continued role
By Inman News, Tuesday, September 28, 2010.
With so many people now saddled with poor credit, reestablishing “nonprime” lending is increasingly important to the future of homeownership, researchers at Harvard University’s Joint Center for Housing Studies argue in a new report.
The 212-page report, “Understanding the Boom and Bust in Nonprime Mortgage Lending,” analyzes how the practice of pooling nonprime mortgages into securities that were sold to investors helped fuel the housing bubble and resulting financial crash and recession.
Although much of that territory has been explored before, the report also looks ahead, drawing lessons from the past to put forward ideas for “sustainable” nonprime lending, and advocating a continuing role for government in guaranteeing mortgage debt.
Nonprime lending — subprime, alt-A and higher-priced lending — grew at a rapid pace during the housing boom, collapsing when the secondary market for those loans froze in August 2007.
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“sustainable non-prime lending” isn’t that like jumbo shrimp or wireless cable?
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