Law Suits & Courts

Title Implications of FDIC Take Over

Posted on Tuesday, October 26, 2010

To: All Florida Offices and Agents of:
Chicago Title Insurance Company
Commonwealth Land Title Insurance Company
Fidelity National Title Insurance Company
From: FNTG Florida Underwriting Department
Date: October 26, 2010
Re: FIRST NATIONAL BANK OF JACKSONVILLE (Jacksonville, FL) – FDIC Appointed Receiver
PROGRESS BANK OF FLORIDA (Tampa, FL) – FDIC Appointed Receiver
The FDIC was appointed receiver on Friday, October 22, 2010, for FIRST NATIONAL BANK OF JACKSONVILLE (Jacksonville, FL) and PROGRESS BANK OF FLORIDA (Tampa, FL). The FDIC immediately entered into purchase agreements to sell the assets of the closed banks, with the buyers shown as follows:
(for First Bank of Jacksonville) – Ameris Bank (Moultrie, GA)
(for Progress Bank of Florida) – Bay Cities Bank (Tampa, FL)
You are reminded that when the FDIC is appointed receiver and simultaneously announces a sale of the failed bank’s assets, this does NOT mean that the REO assets are automatically transferred by state law to the buying bank. Nor does it mean that the buyer can be deemed a “successor” to the failed bank.
The purchase DOES mean that we can treat the buying bank as the owner of certain loans held by the failed bank which the buying bank purchased. Accordingly, we can rely on payoff statements and releases/satisfactions and foreclosure actions by such buying bank—if the buying bank asserts that it is the assignee by purchase (bearing in mind that some buying banks buy substantially less than all of the assets of the failed bank—you may rely on their assertion that a particular loan was acquired by them). For foreclosures, you should keep in mind that the buying bank may be required to prove their ownership of the debt in question. On releases, the buying bank should recite (and you may rely on the recitation) that they are the assignee of the loan.
FOR ASSIGNMENTS AND MODIFICATIONS, it will be necessary to record an affidavit FROM THE FDIC, as receiver, that it sold the particular loan asset to the buying bank. The FDIC is prepared to execute such affidavits.
FOR REO, the proper grantor is the FDIC, as receiver for the named failed bank. Each purchase agreement provides, at paragraph 3.3, that the “conveyance of all assets, including real and personal property interests, purchased by the assuming bank under this agreement shall be made, as necessary, by receiver’s deed or receiver’s bill of sale…” The FDIC is prepared to execute deeds of REO as receiver. The FDIC will commonly grant a power of attorney to certain individuals at the failed bank, at the buyer bank, or internally, to enable the execution of these instruments. When they do so, you are responsible for ensuring that the power of attorney complies with state law requirements for the recordation of these instruments.

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