Gosh, processing paperwork for foreclosures used to be so easy before the end of last month — when everyone started getting so picky, insisting that agents for the mortgage lenders actually read the documents they were signing. What do they expect? Have you ever tried to wade through all that legalese? And now look what’s come of it: On Friday, Bank of America became the next major lender to call for a time-out, announcing it would halt foreclosures and the sales of foreclosed homes in all 50 states — presumably until the company can figure out its best defense against lawsuits. Yes, that would include all B of A mortgages headed for foreclosure in Texas, where ordinarily courts don’t care whether an agent of the lender has any personal knowledge of the signed documents. Bank of America and its subsidiaries have accounted for 31 percent of all Harris County foreclosures so far this year, according to data dug up by Chronicle reporter Nancy Sarnoff.
Also getting in on the break: Litton Loan Processing Services, a division of Goldman Sachs. The Houston company announced Friday it would also stop pushing through foreclosure paperwork — though only in “certain cases.” Next to be held up in the paperwork traffic pile-up: title insurers. A statement released by the company tries to spin it in a different direction, but the AP reported Friday that an internal memo issued by Houston’s Stewart Title would “make it difficult” for the company’s agents to issue insurance policies for properties foreclosed on by Bank of America and other quick-signing lenders: JP Morgan Chase, OneWest Bank and the GMAC Mortgage unit of Ally Financial.
- Ally’s mortgage documentation problems could extend beyond 23 states [Washington Post]
- Bank of America puts sales on hold [Houston Chronicle]
Photo of Bank of America Center: Erin Ferguson
Title insurance is a scam. A scam that untold millions fall for all the time.
Random, all insurance is a scam. Wait till you actually try to collect on a title insurance policy. You’ll crap yourself. Title insurance may well be a scam…but If you are financing the purchase of real property, you must get it. It does serve a purpose, it just cost too much.
You should check out Iowa…they have it figured out in the title insurance business department.
My grandmother received a letter that there was a $32,000 lien on a house she recently purchased that didn’t come up in the title search. The letter claimed that if she didn’t pay up in 30 days, the house would be foreclosed on. Fortunately, she had title insurance, and the lien will be payed in full. How exactly is that a scam?
Title Insurance companies pay out about 1.5% of premiums they take in. In comparison, auto insurance companies are between 40%-50% payout on premiums they take in. It’s a 99% scam.
The cause of this is our laughably antiquated title recording system. This system is what enables the title insurance scam, the county title recording fee scam, and now the I-won’t-pay-my-mortgage-but-you-can’t-have-your-collateral scam.
@ Ian, title insurance is a scam and a racket. It’s a scam in the sense that it only exists because of unnecessary flaws in title recording, the operative word being “unnecessary”. It is a racket in that it is protection money to keep other parts of the racket from exploiting these flaws to sue you to prove that property you own is actually yours.
Honest question: If there’s so much profit to be had in insuring titles and the cat is out of the bag about it, why aren’t there new entrants to the market that are willing to undercut the competition?
Niche there are material barriers to entry. When you have high barriers to entry into a line of business, profit margins can stay large. New entrants on the supply side generally can’t clear these barriers. But this is a red herring – the unsavory aspects of of the business are related to the captivity of the customers.
SUBJECT: GOLDMAN SACHS EMBEZZLEMENT SCHEME – SECRET SECONDS
THE LATEST SCAM – ALERT!!! DO NOT WAIT FOR THE FORECLOUSRE MILLS, SERVICERS OR LENDERS TO GIVE YOU FORECLOSURE DOCUMENTS OR ASSIGNMENTS – THEY ARE NOT GIVING YOU EVERYTHING – ORDER A TITLE SEARCH OR GO TO YOUR COUNTY RECORDER TO SEE WHATS BEEN RECORDED ON YOUR PROPERTY – WE DID AND THIS IS WHAT WE FOUND:
In May 2005 we deposited and invested $200,000 in Real Property, where we recently found out that $118,800 was embezzled out of our property from Mortgage Lenders and Trust Brokerage Companies, namely Goldman Sachs through an escrow Transaction. The $118,800 in funds was paid to these embezzlers from the Investors unbeknownst that the securitization happened by encumbering our property and making up a fraudulent fake Promissory Note and Deed of Trust.
See the link for further information: https://fdaaccount.box.net/shared/a1pjz9sz5c