Saturday, August 02, 2008

"national" title agent aka chop shop in my backyard

is a walking make work project. I'm sorry, that's unkind, let me rephrase.

The record title agent at a local, formerly "national" - server of sub-prime predators - now local and desperate and trying real hard to take local market share - is ignorant of the most simple title issues.

This company is what we traditional title agents call a chop shop. The company is run by someone with no expertise who purchases title commitments from an underwriter who examines title with as much automation as possible and any human review is done by vendor managed clerks in some remote location.

Last week I received a kinda pompous e-mail from this person demanding that I get a prior owner mortgage satisfied. I jumped right into the file because unsatisfied mortgages are not that unusual and I wanted to help get it squared away as quickly as possible.

I took at look at the file wondered what the heck they were talking about because the transaction had gone through foreclosure. It was a Fannie Mae sale. The mortgage lender in question was not the foreclosing lender, however, they had been given good service and everything was hunky dory.

I sent an e-mail response and kindly suggested that they pull the 3129 Affidavit and take another peek at it. The mortgage was divested in foreclosure.

He responded that he had the affidavit and that was insufficient.

I asked him to please contact his underwriting attorney.

He responded that his underwriter had said the unsatisfied mortgage "might be a problem" if the owner wanted to sell in the future.

I said that's ridiculous, but if he wanted, I would process a request for indemnification through our underwriter, however, I expected that the it would be rejected.

It was.

The entire process took a week, mainly because he couldn't produce his own title commitment, which is required for an indemnification request. He likely had to argue with the vendor managed clerk who probably didn't understand that you are supposed to issue title commitments listing your concerns and requirements in Schedule B 1. It always slays me when title agents have no idea what the title commitment is and don't even prepare it themselves. The entire agency program in Pennsylvania is based upon the idea that the value the agent does title examination and produces the commitment.

Now, the most important person in this transaction was the consumer who called me in frustration. I assured her that her title was fine and that we were doing everything we could to make that clear to the title agent handling her refinance. She said she wished her mortgage broker had sent the order directly to us and of course, I agreed. She was up against a rate lock deadline and this ignorant person with a title license was causing her grief for no good reason.

We really need to fix this system. Can we find some way to restore brains in the biz?

6 comments:

Anonymous said...

The best we can do is require prelicensing education and comprehensive testing.

Diane Cipa said...

agreed

Anonymous said...

>It always slays me when title agents have no idea what the title commitment is and don't even prepare it themselves. The entire agency program in Pennsylvania is based upon the idea that the value the agent does title examination and produces the commitment.

See Bulletin 1-05, entitled "Title Insurance Agent Requirements" (issued July 9, 2005) by the Illinois Department of Financial and Professional Regulation, Division of Financial Institutions, Title Insurance Section, located at http://www.idfpr.com/dfi/titleinsur/pdf/Bulletin_105fd.pdf :

". . . it is required that all registered title insurance agents, at minimum, determine insurability of title, which includes engaging in all aspects of the title examination and title clearance functions." (Page 2 of 4)

Diane Cipa said...

Gotta hope most states have some kind of minimum standard for performance of duties. Now all they have to do is enforce it.

The underwriter programs designed to do all the work and simply support ignorant agents referral networks, should be shelved. Let's get the uneducated and sloppy agents out of the biz. Consumers deserve more.

Anonymous said...

I've run into this problem too many times in the last year to count. A major benefit of examining, and being good at it, is that it allows you to close deals without going to others for LOIs/hold harmless letters, etc. I had one of these where I was getting asked to cover the new insurer against a judgment that docketed after a borrower had unambiguously ceased being in title. After I pointed this out, I was told this company (nation's largest realty brokerage) that it no longer used examiners and just "kitchen sinked" its commitments.

I politely told the rep to get her own Drano.

Diane Cipa said...

ha hah ha good one.... ;)