Monday, September 01, 2008

query: national title company files for bankruptcy

You've probably heard about the Mercury Companies bankruptcy. It's a big one and there are likely many creditors out of luck.

Mercury was a title agent, not a title underwriter. That means that they did not underwrite the insurance, they just sold it. The title underwriters - mostly First American - will honor the title policies and are stepping in to clean up a huge HUGE mess.

I am unaware of any comparable situation and so we're all learning here. It will be interesting to see if the corporate veil protects the owners of the company because they apparently have wealth.

It will also be interesting to see how the escrow accounts were maintained and whether in the end the books were reasonably in order.

That said, most consumers caught up in the issue will suffer inconvenience and hopefully not actual loss. We know that checks have bounced in operating accounts of at least one subsidiary. I know of one escrow check that bounced but due to the help of the notary signing agent who pleaded with the insurance department for assistance - the consumer's check was covered.

If you hear of anything you think might be of interest to our readership, please post a comment.

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