Monday, February 28, 2011

Video trailer of "Inside Job", Academy Award winner for Best Documentary

Academy Award winning documentary on Wall Street, greed and lack of any prosecutions of the key players

From the New York Times

“Inside Job,” a searing piece of muckraking on the causes of the financial crisis, took home the Oscar for Best Documentary.

Charles Ferguson, the film’s outspoken director, stayed in character when he bounded up on the stage and opened up his remarks by lambasting the Wall Street crowd.

“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail, and that’s wrong,” Mr. Ferguson said, as the Hollywood crowd erupted in applause.

DealBook colleague Joe Nocera, who has previously written about “Inside Job,” addressed this issue in his column
this past weekend.

Examining why the government wasn’t bringing criminal charges against Angelo Mozilo, the chief executive of mortgage lender Countrywide Financial, Mr. Nocera observed that through the crisis and up until today, Mr. Mozilo praised subprime loans as a way to help lower-income individuals buy into the American dream. For every email in which Mr. Mozilo acknowledged the dangers of subprime lending, there was other evidence that he thought Countrywide’s mortgage business was strong. Mr. Nocera points to recently released government testimony in which Mr. Mozilo calls Countrywide “was one of the greatest companies in the world.”

“Mr. Mozilo would have been difficult to prosecute,” Mr. Nocera concludes. “Delusion is an iron-clad defense.”



Thursday, February 24, 2011

SERS not MERS!

SERS not MERS!

If you have been a reader of The Hallmark Abstract Sentinel then by now you are aware of MERS and the controversy that surrounds it. The Mortgage Electronic Recording System has been at the heart of questionable foreclosures due to standing issues, as well as for having aided in the avoidance of untold millions in recording fees not paid to counties.

It was only a matter of time before someone came up with a way to digitize marriage recordings in a system known as SERS, the Spouse Electronic Recording System (H/T 4closure Fraud).

SERS | SPOUSE ELECTRONIC RECORDING SYSTEM

Mike, on February 21, 2011 at 7:01 am said:

I have finally come to one conclusion: if you can’t beat ‘em, join ‘em!

My proposal is quite simple–a paperless marriage recording system, called SERS, (Spouse Electronic Recording System) for the electronic recording of marriages. To avoid the high costs of (not to mention the hassle of) the filing of marriage certificates, a SERS member would be able to simply record himself or herself as a “nominee” for A marriage to A spouse. The SERS system will record that A marriage has taken place, but the person to whom the SERS member becomes married does not have to be specified until just prior to the termination of the marriage–via divorce or death.

In this manner, one is able to “leave one’s options open.” It is a perfect system for those who would like the stability of the institution of marriage, yet, at the same time, yearn for the flexibility of non-commitment. It announces to the world, “I’m married–I’m just not saying to whom it is that I am married.”

Mind you–the flexibility provided by SERS would have its limits. For example, a SERS marriage could only be assigned to a SERS member, and the marriage would have to be “officiated” by a SERS authorized officer. Nevertheless, virtually anyone with a pulse, $25 for an official SERS certifying officer stamp, an ink jet printer, and access to a SERS terminal could become a certifying officer of SERS. (And then there is Provision K, the “Kunkle Provision,” which provides for dead certifying officers, as well.)

At the “consecration” of the relationship–which is technically an “agency relationship,” the marriage will be given a SIN number, or Spouse Identification Number. In this manner, through the SIN number, any married person can track who their actual spouse is–except in the case of most situations–where the SERS member prefers to keep that information private. Rest assured, however, if you die or if you cause a divorce, a spouse will be assigned to you at least 30 days prior to such death or divorce, except in the case of most situations, where the spousal nominator doesn’t know what the heck is going on—wherein an assignment will be backdated to reflect that the spousal assignment transpired 30 days prior to said death or divorce.

Due to the high-tech nature of the proprietary data tracking software used by SERS, only one employee of SERSCORP will be necessary, and the cost of her salary and generous bonus structure will be virtually unnoticeable as it is skimmed off one marriage transaction fee at a time as SERS marital swaps are traded seamlessly Over The Counter through Cayman Island accounts. Due to the swapping functionality enabled by their individual (original) SINs, SERS marriages will facilitate the marital churning process without the pain, humiliation, or cost of conventional marital swapping. The cost of SERS transaction fees will be recouped in the sheer volume of marital business as marriage certificates are securitized into MBS (Marriage-Backed Securities.)

Keep in mind that many marital swaps can be transacted over the life of a SERS marriage, and the nominee spouse will be unaware of such arrangements. However, therein lies the genuine excitement that only fraud-ridden obfuscation could ever bring to a marriage. (Will my nominee spouse be long? Will my nominee spouse be short? Will my nominee spouse be naked? Will my nominee spouse purchase enhancements? Will my nominee spouse be synthetic? Will my nominee spouse be square?)

At SERSCORP…we’ll put the SERS in Sersprise!

This is of course a fiction...For now!

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Wednesday, February 23, 2011

MERS and the avoidance of mortgage recording fees is the next shoe to drop


MERS (Mortgage Electronic Registration System) and the avoidance of mortgage recording fees

Currently MERS is dealing with a storm in the foreclosure arena over whether or not a lender was legally able to foreclose on a mortgage in MERS name. This has led the firm to issue an announcement instructing all of its members to cease this practice immediately ("Is MERS attempting to put the genie back into the bottle with yesterdays announcement")

Remember that MERS was established for the purpose of creating an electronic system that was able to easily assign mortgages from one entity to another. This became critical in the age of securitizations when this paper would change hands quickly and often.

As part of this business model, members were able also to bypass the recording of mortgages in county clerks offices with a resulting savings of money by avoiding recording fees.

Suits by counties to recoup these recording fees may be the next landmine that MERS will face!


This from Salem, Massachusetts yesterday (H/T Naked Capitalism):

O’BRIEN CALLS ON MERS TO COME CLEAN AND PAY UP: SAYS ESSEX COUNTY OWED $22 MILLION DOLLARS

Essex South Register of Deeds John O’Brien announced today that he will be seeking over $22 million dollars from the Mortgage Electronic Registration System, “MERS” which represents several major banking conglomerates. O'Brien bases the $22M number on the fact that the Salem registry has recorded over 148,663 MERS mortgages since 1998. After a careful review of a number of these mortgages O’Brien said it became very clear to him that MERS had assigned mortgages to other entities at least twice without paying a recording fee. Based on this information the taxpayers have been defrauded out of $22,299,450 in Southern Essex County alone. It is quite possible that in some cases they may have assigned the notes more than twice resulting in even greater loss of revenue. O'Brien called MERS "one of the greediest schemes ever perpetrated on the American people. They have compromised the integrity of the public land recordation system and in doing so, have wreaked havoc on our economy”.

Last week MERS announced a major policy change conceding that assignments should be recorded in the various Registries across the country and “assignments out of MERS’s name should be recorded in the county land records, even if the state law does not require such a recording.” In addition MERS instructed its members to “not foreclose in MERS name”. O'Brien further states “MERS has now finally acknowledged that their business model was flawed, and they didn’t adhere to the legal requirement that all assignments of a mortgage must be recorded at the local Registry of Deeds.” “If they had followed the law the public would know who was buying and selling their mortgage, and it would have been an open, honest and transparent process. The fact that they deliberately chose to create a for-profit private cyber Registry of Deeds whose only purpose was to avoid paying the same fees as everyone else and keeping the public in the dark as to who was the rightful owner of the mortgage clearly demonstrates to me that this was a scheme of epic proportions.” “When Wall Street and these major lenders joined together in creating MERS, they plunged us into a housing nightmare with little or no regard for their actions. It's obvious that their only motivation was to manufacture huge profits off the backs of homeowners and taxpayers. They should all be ashamed of themselves and step up to the plate and do the honorable thing and make the taxpayers' whole,” O'Brien said.

The Essex South Registry of Deeds is one of 21 Registries in Massachusetts which have recorded MERS mortgages .O’Brien estimates that based on his conservative estimate of two assignments per mortgage the Commonwealth may be owed statewide upwards of $200 million dollars in lost recording fees. Nationwide, the amount of revenue lost could be in the billions. O’Brien is calling on MERS to come clean and inform the registers of deeds across the country as to the number of times they assigned mortgages to other entities. Only then will we get a true picture of the economic impact that this fraud has had on our country.

O’Brien, who in November, 2010, notified Massachusetts Attorney General Martha Coakley about MERS, will now be forwarding to her this additional information. “We need to act quickly to recover these funds,” O’Brien said.

Think MERS facing counties nationwide

Now imagine that what this county is attempting to do is done by every county in the nation. Pretty soon it becomes real money! Stay tuned.

Tuesday, February 22, 2011

Is the Case-Shiller Index visual evidence of a double-dip in home prices (Chart)

The Case-Shiller Index

The S&P/Case–Shiller U.S. National Home Price Index is a composite of single-family home price indices for the nine U.S. Census divisions. It is updated monthly. The national index is normalized to have a value of 100 in the first quarter of 2000. (Wikipedia)

What is a double-dip?

As a former trader we had a saying that nothing goes straight down. A severe move down will often be followed by a bounce in price before resuming the downward move. This is what is called a double-dip. This move happening is not 100% given, but it happens more often than not.

A fear is that the bottom that was set for home prices in Q1 2009 may not hold creating further angst for an already weak economy trying to find firm footing.

Thursday, February 17, 2011

Is MERS attempting to put the genie back into the bottle with yesterdays Announcement?

MERS - The Mortgage Electronic Registration System issues an Announcement that appears to be an attempt to put the genie back into the bottle

Summary: MERS has told its members not to foreclose in its name on home loans, effective immediately.

As a recap for those not closely following the issues surrounding MERS and foreclosures, this is hopefully a clear summary of an extremely complicated situation:

The MERS-Mortgage Foreclosure story

In the old days a potential borrower would go to their local bank, apply for a mortgage, qualify for the mortgage (or not) and then enter into an agreement with the bank. The transaction consisted of a note or an IOU representing a promise to repay the bank and the mortgage that pledged the property as collateral. After the closing the mortgage would be recorded in the county records. The bank would then typically "portfolio" the loan or keep it on its books until it was paid off.

Then came the age of easy money with no- income check loans, no-income no-asset check loans and other creative financing techniques where if you had a pulse you had yourself a loan. Whether you could actually afford it or not did not really come into play. This worked for a while because home prices were going up fast and the borrower who couldn't afford the home in the first place would flip it and make some cash along with the mortgage broker and everyone else up and down the real estate food chain.

Wall Street investment banks had developed REMICS or collateralized mortgage obligations (CMO's) as a conduit for making money, a lot of money. Loans were made, quickly resold by the bank originating it, then maybe resold five more times until it was packaged along with thousands of other similar loans and resold to investors all over the world often with AAA ratings (a story for another time).

All of this worked just fine until prices stopped going up and then started to actually decline. As the influx of foreclosures grew, along with them came serious questions about the process and paperwork involved in all of these mortgage transfers. These questions would most likely never have come up if those damn real estate prices just kept going up like they were supposed to do and foreclosures were few and far between.

Questions surrounded MERS, the electronic database that served to take the place of recording mortgages in the county records (along with a lot of saved filing fees). Could MERS be the foreclosing entity? Were assignments of mortgages actually done in MERS and were they done correctly? Issues surrounding robo-signers and fraudulent notarizations of documents. Questions over whether the entity initiating the foreclosure actually had the standing to foreclose and if the chain of title was intact and provable? Who actually had the original note or IOU?

From this came a variety of other legal issues such as completed foreclosures getting reversed, a moratorium on foreclosures, attorney's being required to sign affirmations that all of the paperwork was done correctly and demands by some underwriters of title insurance that in a foreclosure sale the seller indemnify the title insurer against the foreclosure being reversed due to incorrect paperwork.

At the heart of the matter is MERS, a database put into place to help streamline the process of mortgage assignments and to save filing costs in the securitization age.

This brings us back to the Announcement MERS issued to its Members yesterday. A short summary below followed by the Announcement in full:

"... In recent months legal challenges have arisen regarding alleged inadequacies and improprieties in the foreclosure process including allegations of insufficient or incorrect supporting documentation and challenges to the legal capacity of parties’ right to foreclose. MERS is committed to reevaluate and strengthen its systems and procedures to protect against these types of legal challenges…

During this period we request that Members do not commence foreclosures in MERS’ name. If a Member determines that it will commence a foreclosure in MERS’ name during this 90-day period, two weeks advance notice must be given to MERS to permit verification of the appointment and current status of the Certifying Officer proposed to participate in the foreclosure. No foreclosure may be processed in MERS’ name without first obtaining this verification. We encourage Members to bring foreclosures only in the name of the holder of the note, in the name of the trustee or the servicer of record acting on behalf of the trustee…”

The steps discussed in the announcement do not seem to address the majority of the issues swirling around MERS and foreclosures. This is the complete announcement:


Announcement
Number 2011-01

Page 1 of 2
To: All MERS Members February 16, 2011
Re: Foreclosure Processing and CRMS Scheduling

MERS is providing the following guidance to all Members to strengthen business practices, and minimize
reputation, legal and compliance risk to MERS and its Members. In recent months legal challenges have arisen regarding alleged inadequacies and improprieties in the foreclosure process including allegations of insufficient or incorrect supporting documentation and challenges to the legal capacity of parties’ right to foreclose. MERS is committed to reevaluate and strengthen its systems and procedures to protect against these types of legal challenges. Consistent with this approach we have enhanced the Corporate Resolution Management System (CRMS) and instituted related policies and procedures designed to strengthen MERS’ business practices and limit compliance risks. To comply with this guidance, MERS Members should implement the following practices, effective immediately.

1. MERS is planning to shortly announce a proposed amendment to Membership Rule 8. The proposed
amendment will require Members to not foreclose in MERS’ name. Consistent with the Membership Rules there will be a 90-day comment period on the proposed Rule. During this period we request that Members do not commence foreclosures in MERS’ name. If a Member determines that it will commence a foreclosure in MERS’ name during this 90-day period, two weeks advance notice must be given to MERS to permit verification of the appointment and current status of the Certifying Officer proposed to participate in the foreclosure. No foreclosure may be processed in MERS’ name without first obtaining this verification. We encourage Members to bring foreclosures only in the name of the holder of the note, in the name of the trustee or the servicer of record acting on behalf of the trustee.

2. MERS Members shall have a MERS Certifying Officer (also known as MERS Signing Officer) execute
assignments out of MERS’ name before initiating foreclosure proceedings. Assignments out of MERS’ name should be recorded in the county land records, even if the state law does not require such a recording (see MERS Membership Rule 8).

3. For all future assignments and the execution of other documents in the name of MERS, Members must use a MERS Certifying Officer who has been appointed under our new certifying officer process, which, after November 1, 2010, uses a new form of corporate resolution. Under our new process, all Certifying Officers are also being tested and appointed under the enhanced CRMS. Only Certifying Officers appointed under the new form of corporate resolution, tested, and transitioned onto CRMS after November 1, 2010 should execute assignments. We are in the process of ensuring that all Members are transitioned onto CRMS in compliance with our new policy, and we will work with all Members to ensure the transitions can be accomplished in an orderly and expeditious way. For those Members who have not undergone this transition onto the CRMS, you will receive login credentials and further instructions from MERS on how to complete this process. It is important that you follow all instructions and that you complete this process as quickly as possible. MERS will be communicating with you to notify you when your Company will be transitioned onto the CRMS under our new policy. Once your Company has access to the CRMS, all of your existing and potential Certifying Officers should work quickly to complete the certification process. Once all of your existing and potential Certifying Officers have successfully completed the certification process, you will need to submit your request to MERS for approval. Submissions from your Company will only be accepted during the phase-in period
assigned to you. Because it will take some time to transition under our new policy, Certifying Officers
can continue to execute documents in MERS’ name under existing resolutions until the new corporate
resolution is issued to your Company. However, if your Company does not submit the request to MERS
through the CRMS in the timeframe assigned to you, you will not be issued a new corporate resolution and any prior corporate resolutions issued to your company will be revoked.

Page 2 of 2
4. MERS Members should ensure the accuracy of the information in the complaint and foreclosure affidavit that addresses, where applicable, the authorization under which a MERS Certifying Officer validly assigned the mortgage to the foreclosing note-holder.

5. Other business practices Members should perform on a periodic basis include:
Conduct a review of employees designated as Certifying Officers and reconcile to the CRMS to ensure MERS has an up-to-date and accurate list of Certifying Officers; Ensure employees designated as Certifying Officers receive appropriate training to carry out their duties and responsibilities as Certifying Officers; and Reconcile with CRMS to update corporate resolutions and signing authority agreements to ensure appropriate Certifying Officers are validly appointed.

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Monday, February 14, 2011

The President is proposing a reduction in the mortgage interest deduction

While the title of the the article rhymes, the proposal is far from entertaining

On page 1 of the Fiscal Year 2012 Budget of the U.S. Government you can begin to read The Budget Message of the President. In the preamble he discusses the recession and the fact that due to fiscal realities we face hard choices.

On page 4 the President proposes a 30% cut in itemized deductions for high-income taxpayers to use to pay for a fix to the Alternative Minimum Tax. What this means is that the mortgage interest deduction is being targeted again in the same way that it was in the 2011 Budget when its elimination was defeated.

As has been discussed in many quarters, the real estate market is facing a multitude of headwinds compounded by a recent move up in mortgage rates and the proposal to shrink the role of Fannie Mae and Freddie Mac.

This shrinkage, ala Seinfeld, would force borrowers to rely more heavily on private mortgage lenders who have shown a great reluctance to lend in the past to any but the most stellar of borrowers. This, although they had received 10's of billions of dollars from the federal government for that very purpose.

One of the things that the country needs most to get out of the economic doldrums we find ourselves in is to clear out the buildup of housing inventory and get the real estate market back on its feet.

Slicing the mortgage interest deduction would not accomplish this and would in fact take buyers out of the market. Positioned as a hit to the wealthy, this proposal would in reality impact those up and down the income scale!

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Sunday, February 13, 2011

MERS takes a hit in N.Y. decision In re: Ferrel L. Agard in the Bankruptcy Court in the Eastern District of New York

While this decision does not help Ms. Agard (due to Res judicata) it does seriously call into question the validity of MERS assigning mortgages on behalf of its members/lenders.

These are some excerpts from the decision which can be read in its entirety here.

"...The Court recognizes that an adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States. However, the Court must resolve the instant matter by applying the laws as they exist today. It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices. MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law...

...The Movant’s failure to show that U.S. Bank holds the Note should be fatal to the Movant’s standing. However, even if the Movant could show that U.S. Bank is the holder of the Note, it still would have to establish that it holds the Mortgage in order to prove that it is a secured creditor with standing to bring this Motion before this Court. The Movant urges the Court to adhere to the adage that a mortgage necessarily follows the same path as the note for which it stands as collateral. See Wells Fargo Bank, N.A. v. Perry, 875 N.Y.S.2d 853, 856 (N.Y. Sup. Ct. 2009). In simple terms the Movant relies on the argument that a note and mortgage are inseparable. See Carpenter v. Longan, 83 U.S. 271, 274 (1872). While it is generally true that a mortgage travels a parallel path with its corresponding debt obligation, the parties in this case have adopted a process which by its very terms alters this practice where mortgages are held by MERS as “mortgagee of record.” By MERS’s own account, the Note in this case was transferred among its members, while the Mortgage remained in MERS’s name. MERS admits that the very foundation of its business model as described herein requires that the Note and Mortgage travel on divergent paths. Because the Note and Mortgage did not travel together, Movant must prove not only that it is acting on behalf of a valid assignee of the Note, but also that it is acting on behalf of the valid assignee of the Mortgage..."

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Friday, February 11, 2011

Hallmark Abstract Service is looking for a few good people!

Hallmark Abstract Service is looking for salespeople to help us expand our business

While there is no question that the economy is extremely challenging right now, Hallmark Abstract Service is extremely fortunate that the growth of our title business has put us in the position to bring on new salespeople.

If anyone reading this has an interest in finding out more about the firm and the opportunity, or if you know someone who you think may be, please let us know.

The Opportunity

Hallmark Abstract Service of Jericho, NY is looking to add two experienced title salespeople to help us grow our business in the five boroughs of New York City and on Long Island. We are an established title insurance provider with an excellent reputation and strong client base.

Our ideal candidate will be hard working, detail oriented, organized, self-motivated and competitive. Our salespeople must be able to aggressively develop business relationships in the fast-paced mortgage lending environment. Previous experience within the mortgage/title insurance industry is required and an existing book of business is preferred.

We offer a generous draw, transportation allowance and a commission payout based on performance.

If you are interested in speaking with us, please contact Michael Haltman by email at mhaltman@hallmarkabstractllc.com. To find out more about Hallmark, please visit our website at http://www.hallmarkabstractllc.com.



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Wednesday, February 9, 2011

Buyers are not afraid of buying bank REO's! (chart)

Despite the questions swirling around foreclosures, the survey says that the majority of Americans are still willing to buy

Over the last few months The Hallmark Abstract Sentinel as well as the partners of Hallmark Abstract Service have tried to outline all of the issues that exist in the world of foreclosures that can potentially make the purchase a somewhat risky bet.

We have spoken about topics that include MERS, Standing to foreclose, failure to have clear chain of title, failure to have adequately documented mortgage assignments and more.

We have discussed cases that have reversed completed foreclosure actions such as the Ibanez decision in Massachusetts and the fact that in New York attorney's are now required to sign an affirmation which basically states that they know of all of the paperwork in the action and are comfortable with its validity and accuracy.

In cases where questions exist that cannot be answered satisfactorily title insurers may decline to issue a policy or require that the lender involved in the foreclosure sign an indemnification that says that if any issues over the foreclosure and title to the property arise in the future that they, and not the title insurer, are on the hook.

Michael Haltman, partner in Hallmark Abstract Service has appeared on the radio and will be teaching a CLE class in New York on these many risks.

That said, a survey conducted by the Home Buying Institute indicates that buyers are just not afraid. The graph is below, and as always, caveat emptor!



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Monday, February 7, 2011

Title insurance and protecting yourself in a foreclosure purchase




Protecting your investment being purchased within the foreclosure crisis maze

As we discussed through the example we gave in the article on Saturday of a denied title policy, it is critical for buyers of foreclosed property to be absolutely certain that they are getting good, clean title and that they buy an owner's policy.

This goes for an REO or a property purchased through an auction.

There are too many questions swirling around this sector of the market to do otherwise. Equally as important is that the buyers attorney, or the buyers themselves if they are arranging the title insurance, is sure that the title company being used is current and knowledgeable on any new court decisions that may affect them now or in the future.

This is our Example #2 of a transaction that we denied to issue a title policy on.

Example # 2- Non-insurable Title

Indymac Federal Bank gives a mortgage to Mrs. Orange and records the mortgage in MERS as “nominee”.

Mrs. Orange stops making payments on her mortgage and Indymac starts an action to foreclose on August 12, 2008

MERS assigns the mortgage back to Indymac (see attached).

Indymac proceeds with the foreclosure and gets the property back via a referee’s deed.

REASON FOR TITLE UNDERWRITER’S REFUSAL TO INSURE

Although Indymac got an assignment of the mortgage, the assignment was signed and notarized on August 15, 2008. Even though there is language in the assignment stating that the assignment was “as of August 11, 2008”, the title company will not insure this title without an indemnification from the bank.

Hallmark Abstract Service of New York is always available for interviews on the subject of title insurance and the foreclosure crisis.

For information please contact Michael Haltman at mhaltman@hallmarkabstractllc.com or call him at 516.741.4723.

Hallmark Abstract Service: Have you ever been to a closing where the title wasn't cleared? We haven't!

Saturday, February 5, 2011

An example of a denied title policy due to the foreclosure crisis





Foreclosures, REO's (real estate owned) and auctions on the courthouse steps have one thing in common:

A critical need for the buyer to make sure that they can get clear title, owner's title insurance (owner's policy) and, in the case of an auction on the courthouse steps, to ascertain beyond a reasonable doubt that the property is in fact insurable before having to risk a 10% deposit!

At Hallmark Abstract Service we devote a good deal of our time staying abreast of any and all new developments that occur in the area of foreclosures and the insurability of title on properties. As some recent court decisions around the country have shown, being absolutely certain that a buyer is getting clear title to the property is as critical as any other aspect of the transaction!

An example of transaction Hallmark Abstract Service declined to insure

Example # 1- Non-insurable Title


Fremont Investment and Loan gave a mortgage to Mr. Green and recorded the mortgage in MERS as “nominee”.


Mr. Green stopped making payments and Fremont began a foreclosure action against Mr. Green (Fremont was the plaintiff).


While Fremont held the note the mortgage was never assigned back to Freemont.


Fremont then sold the loan to U.S. Bank.


Fremont had MERS assign the mortgage from MERS to U.S. Bank directly.


U.S. Bank continued with the foreclosure and got a deed through the referee at the foreclosure sale.


REASON FOR TITLE UNDERWRITER’S REFUSAL TO INSURE


According to the current interpretation of foreclosure law by the title companies, in order for this foreclosure to have been done legally, MERS would have had to assign the mortgage back to Fremont Investment before they started their action.


It is the opinion of the title companies that Fremont was not the holder of the mortgage at the time it started its foreclosure so it did not have the STANDING to foreclose and therefore unless the bank signs an indemnification agreement (which most are refusing to do) they will not insure the sale.



Hallmark Abstract Service
of New York
is always available for interviews on the subject of title insurance and the foreclosure crisis.

For information please contact Michael Haltman at mhaltman@hallmarkabstractllc.com or call him at 516.741.4723.

Hallmark Abstract Service: Have you ever been to a closing where the title wasn't cleared? We haven't!


Foreclosure crisis: Make them produce the note! (Video)

"Show me the money" - Jerry Maguire, the movie

"Show me the note" - judges around the country

If you are facing foreclosure, or in the process of having your house foreclosed, you do have rights. Make sure that the lender foreclosing has the right, or standing to do so.

Make them "show you the note."

Wednesday, February 2, 2011

American Banker: New wrinkle in the foreclosure mess



New Point of Foreclosure Contention: Default Notice

Last year's robo-signing scandals delayed tens of thousands of foreclosures in the 23 states where the process is handled in court. A new controversy could complicate foreclosures in the other 27 states.

At issue is the notice of default, the first letter that a mortgage lender or servicer sends to a homeowner who has fallen behind on payments. The notice typically starts the formal foreclosure process in nonjudicial states such as California, Arizona and Nevada.

Every notice of default has a signature on it. But just like the infamously rubber-stamped affidavits in the robo-signing cases, default notices, in at least some instances, have been signed by employees who did not verify the information in them, court papers show. In several lawsuits filed in nonjudicial states, borrower attorneys are arguing that this is grounds to stop a foreclosure... (Read the full article at the link above)