Florida foreclosure firm's title insurer won't insure firm's foreclosure titles
10/08/2010 © Palm Beach Post
The title insurance arm of one of the state's largest foreclosure law firms is refusing to cover properties foreclosed on by its own attorneys citing potential defects in court filings.
New House Title, which is owned by the same people who run the Tampa-based Florida Default Law Group, sent notice to a Boca Raton real estate attorney Wednesday that a 2009 foreclosure was off limits.
What Attorney Robert Feldman found interesting in New House's denial for the Deerfield Beach condominium is the foreclosure was handled by the Florida Default Law Group. "It is somewhat surprising that now they won't even insure their own work," Feldman said.
The New House email faults JPMorgan Chase for the rejection. Chase is one of three national lenders, including Ally Financial Inc., and Bank of America, that has suspended some foreclosure proceedings to review and correct flawed documents that may have been used to take people's homes.
"We have become aware of potential defects with affidavits submitted by the servicer, JPMorgan Chase or an affiliate, in foreclosure actions, which raise concerns about the insurability of the title of the subject property," said the e-mail sent by Fran Morrison, a closing processor with New House Title. "Until these defects have been remedied, we are unable to proceed with the sale or closing of the foreclosed properties."
Title insurance protects homeowners against financial loss from defects in the title, liens on the title or if the title is not what it is represented to be. Last week, Old Republic National Title Insurance, the fourth-largest title insurer in the country, directed agents in some states not to write new policies for Ally foreclosures because of concerns over court filings.
Lisa Nason, a spokeswoman for Florida Default, said New House makes title insurance decisions on an individual basis and does not have an "official policy or opinion." The document problems acknowledged by the banks include the use of so-called "robo-signers" to approve tens of thousands of foreclosure documents that they claimed to personally verify, although they did not.
In many instances, those affidavits were then filed with the court by the state's large foreclosure law firms. Florida Default, which has filed a motion to quash an investigative subpoena by the state attorney general's office, has been withdrawing affidavits statewide on foreclosure cases claiming previously submitted information may have been inaccurate.
Tampa-based attorney Mark Stopa said Florida Default should have known the affidavits were
flawed. One Ally employee said under deposition that he signed as many as 10,000 foreclosures every month.
"They're the ones who prosecuted the foreclosure case. If there's no clear title, it's because they did it wrong," Stopa said. "They're acknowledging their own incompetence." It's not unusual for foreclosure firms to also have title companies.
Attorney David J. Stern, whose Plantation-based law firm handles a large number of foreclosures, is chairman and CEO of DJSP Enterprises. The publicly traded company, which issues title insurance as well as handling other mortgage processing issues, reported $56.1 million in revenue for the second quarter of this year.
Stern's firm is also the subject of a state investigation, although it has also filed a motion quash the state's subpoena.
Attorney Jeffrey Tew, who represents Stern, said they have no comment on the title insurance issues.
10/08/2010 © Palm Beach Post
The title insurance arm of one of the state's largest foreclosure law firms is refusing to cover properties foreclosed on by its own attorneys citing potential defects in court filings.
New House Title, which is owned by the same people who run the Tampa-based Florida Default Law Group, sent notice to a Boca Raton real estate attorney Wednesday that a 2009 foreclosure was off limits.
What Attorney Robert Feldman found interesting in New House's denial for the Deerfield Beach condominium is the foreclosure was handled by the Florida Default Law Group. "It is somewhat surprising that now they won't even insure their own work," Feldman said.
The New House email faults JPMorgan Chase for the rejection. Chase is one of three national lenders, including Ally Financial Inc., and Bank of America, that has suspended some foreclosure proceedings to review and correct flawed documents that may have been used to take people's homes.
"We have become aware of potential defects with affidavits submitted by the servicer, JPMorgan Chase or an affiliate, in foreclosure actions, which raise concerns about the insurability of the title of the subject property," said the e-mail sent by Fran Morrison, a closing processor with New House Title. "Until these defects have been remedied, we are unable to proceed with the sale or closing of the foreclosed properties."
Title insurance protects homeowners against financial loss from defects in the title, liens on the title or if the title is not what it is represented to be. Last week, Old Republic National Title Insurance, the fourth-largest title insurer in the country, directed agents in some states not to write new policies for Ally foreclosures because of concerns over court filings.
Lisa Nason, a spokeswoman for Florida Default, said New House makes title insurance decisions on an individual basis and does not have an "official policy or opinion." The document problems acknowledged by the banks include the use of so-called "robo-signers" to approve tens of thousands of foreclosure documents that they claimed to personally verify, although they did not.
In many instances, those affidavits were then filed with the court by the state's large foreclosure law firms. Florida Default, which has filed a motion to quash an investigative subpoena by the state attorney general's office, has been withdrawing affidavits statewide on foreclosure cases claiming previously submitted information may have been inaccurate.
Tampa-based attorney Mark Stopa said Florida Default should have known the affidavits were
flawed. One Ally employee said under deposition that he signed as many as 10,000 foreclosures every month.
"They're the ones who prosecuted the foreclosure case. If there's no clear title, it's because they did it wrong," Stopa said. "They're acknowledging their own incompetence." It's not unusual for foreclosure firms to also have title companies.
Attorney David J. Stern, whose Plantation-based law firm handles a large number of foreclosures, is chairman and CEO of DJSP Enterprises. The publicly traded company, which issues title insurance as well as handling other mortgage processing issues, reported $56.1 million in revenue for the second quarter of this year.
Stern's firm is also the subject of a state investigation, although it has also filed a motion quash the state's subpoena.
Attorney Jeffrey Tew, who represents Stern, said they have no comment on the title insurance issues.
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