To make that billion-dollar question even more chilling is the fact that, in many cases, the banks have already sold said homes to new buyers -- new buyers with title insurance of their own. If the average title search is anywhere near as flawed as the document checks of the robosigners, we're in for some wild court cases.
Read more: Hot potato time for title insurers | Bankrate.com http://www.bankrate.com/financing/mortgages/hot-potato-time-for-title-insurers/#ixzz1A4rnMD4U
Read more: Hot potato time for title insurers | Bankrate.com http://www.bankrate.com/financing/mortgages/hot-potato-time-for-title-insurers/#ixzz1A4rnMD4U
And now all the brainiacs of TitleSmart, Next Ace, and short search lovers of old will be tested.
2 comments:
I've got one right now where the borrower purchased the house in 2004. Instead of using a Deed of Trust (customary in California) the brain trust at WFB used a line of credit for $380k. Then they gave him an Heloc for $100k. He refinanced in 2005, paid off the $380k, subordinated the $100k and took out a new first for $451k to expand his business. Except WFB left the $380k line of credit open. He was a business owner, business turned south and he ran the $380k back up trying to save his business. Now there is $931k in debt on a $260k house. The instructions to escrow tell them to pay off the $380k and there is a charge for a reconveyance. They $380k thinks they are in first position, and they are. The $100k thinks they're in 2nd position and they are in 3rd position. And oh yeah, the insured 1st is in 2nd position. And he lost his business so he is months behind on all three. Wheeee! They question is, does he just throw in the towel or does he try to get something worked out? And if they do foreclose, how many years are they going to be tied up in litigation before it can be sold? Big fun in the Golden State.
In other news, I was contacted last week by someone looking for an expert witness in a case against the Evil Empire. I had to decline. I just didn't want to sit on the stand and have Pink Bunny Ears read to me by their defense attorney.
LOL...aw, that would have made an awesome YouTube. ;)
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