Thursday, February 28, 2008

We had a near miss in title today .....

and if it's happening here, it's got to be happening everywhere.

THE PROBLEM The Sheriff's office is so overwhelmed with foreclosure volume that they can't provide data to the Prothonotary as quickly as usual and so YOU CANNOT RELY UPON A CURRENT SEARCH OF THE PROTHONOTARY'S office.

I have a title commitment to issue on a property going to Sheriff's sale on Monday. My prudent purchaser chose to vet the title for an owner policy. The commitment is convertible into a policy should he be the successful bidder. Soooooo, I'm examining title and I see no mention of the Sheriff's sale in the abstract report....and I'm thinking what the heck?

The foreclosure record as reported stops with notice of service. I called my abstractor and sent her back to the Prothonotary to find out why things are so out of date and the Prothonotary gives a glare and says talk to the Sheriff's office, so she flies down to their office and looks at the file and finds all this additional data including the notice of the Sheriff's sale. EVERYBODY is complaining because you can't reply upon normal search methods.

We immediately change procedure and now if there is a foreclosure action started, she's going to the Sheriff's office for an up to date record.

I hear you saying, well what's the problem? Why the alert?

Imagine, if you will that I did not know a sale was scheduled for Monday and I had a transaction in process due to close on Tuesday. Let's say the seller is unscrupulous and the mortgage lender is sloppy. We get a payoff letter and proceed to close on Tuesday WITHOUT knowing that the property had been sold on Monday. That, my friends is a total failure of title.

I ask you. What are the remote title companies who are closing transactions in this county doing? If they are relying upon the Prothonotary data available on-line, or inexperienced examiners, they'd be in for a surprise and so would others involved in their transactions.

How many people are working on short sales expecting postponements of sheriff sales and have a disconnect between loss mitigation and the foreclosing attorney?

Yes, the homeowner has title insurance BUT........a total failure of title usually means that you lose the house and that's not the happy ending we strive for.

Select your title professionals carefully. Choose expertise with a learned presence and feet on the ground in the actual county in which the property resides. Safety is sometimes in the nuances of title. Can't be too careful when swimming in a flood of foreclosures.

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