Thursday, September 06, 2007

Mr. Much Ado About Nothing

Dear Mr. Much Ado About Nothing:

I am in receipt of your letter dated September 5th directed to redacted implying that you and she had discussed this issue. No such discussion took place.

I received a call from your secretary last week in which she made inquiries about the unsatisfied mortgage. I told her we were aware of the mortgage and had insured over it due to the age. [Note that our owner policy does not state that were are no mortgages of record. It simply does not except any from coverage.] She placed me on hold and conferred with someone, perhaps you, who said they were unsure that you could get title insurance with the outstanding lien.

I assured her that you could and offered to process such coverage in the form of an indemnification letter from redacted to the title underwriter you propose to use. I asked your secretary to fax the title commitment and a letter requesting indemnification so we could proceed. I have received no response to that request.

It is customary and usual in the business of title insurance to use indemnification as an interim measure in the case of issues like unsatisfied mortgages. The letter is issued for the benefit of your office and the title underwriter so that you may proceed without liability to close and insure your proposed buyer and/or lender. It takes a mere 24 or 48 hours to acquire such a letter.

I agree that time is of essence in any real estate transaction and while you may feel that a 72 year old $2000 mortgage obligation imposes great risk to the title, I fail to understand why your title underwriter would refuse indemnification from redacted.

Mr. redacted called yesterday to discuss the matter and I extended an offer to issue title insurance to his buyer and/or lender should the need arise.

This is not a question of marketability of title, Mr. Much Ado About Nothing, because title insurance is available without exception on this matter from every reputable title underwriter with which I have worked. The homebuyer has many an option, which would fulfill the bargain made with Mr. redacted.

Should you wish to process an indemnification request directly with redacted rather than release the title commitment to my office, you may do so by contacting Atty. redacted of their Pittsburgh office at redacted. He has a copy of the owner policy, is aware of the issue, and has offered his assistance to you.

I have to officially retract any previous credit given. Yoi!


Brendan said...

In a pinch, we could have shown the mortgage as an exception and then insured that the mortgage would not have been collected out of the property.

Diane Cipa, The Closing Specialists® said...

The mortgage lender won't accept the exception and Mr. Much Ado is performing under the typical conflict of interest scenario. He is representing the lender, the title company and the buyer. He won't allow his buyer to accept the exception.

Diane Cipa, The Closing Specialists® said...

This transaction finally closed in the second week of October. Mr. Much Ado ran his title search in July and tortured our insured "in glee" until my last letter [See "weasel" post.] enraged him to the point of showing it to the attorney who was acting as the title agent.

This was a crucial turning point because the attorney immediately called the title underwriting attorney copied on my letter and once he understood the underlying issue, was able to get Mr. Much Ado to move forward under indemnification.

So, from July to October, our insured who really needed to sell the home was terrified of Mr. Much Ado. He recognized that he was slightly off his rocker and near the end expressed to me his terror that Mr. Much Ado would put something in the deed that would allow him to continue to harrass him into the future.

At that point I realized that Mr. Much Ado was acting as attorney for both the buyer and seller and this made the conflict of interest level sky rocket to the point of pure negligence of duty. I recommended two attorneys, one of whom the insured hired to represent him and now, of course, the case is closed.

Goodbye, Mr. Much ado, and good riddance!