Law Suits & Courts

Title Guidelines for Robo Signer Cases

Posted on Tuesday, October 26, 2010

2010-23
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: INSURING FORECLOSED PROPERTIES
In the current environment of questions about and challenges to the foreclosure process across the country it is imperative that we review the procedures for underwriting titles that come through foreclosure.
Attached as Exhibit A to this Bulletin are the Guidelines that must be followed for the issuance of title insurance in Florida when the Insured is the purchaser of REO or the non-lender purchaser at the foreclosure sale. You are expected to examine the proceedings and raise any appropriate exceptions to issues or deficiencies you discover in the proceedings or process. Please pay particular attention to parties in possession, proper and timely notice as required by statute and possible mechanic’s lien issues due to rehab work performed by the foreclosing lender.
If you have any questions on a specific file or issue, please discuss with your advisory title office, local counsel or state underwriting counsel.
UNDERWRITING BULLETIN
FNTG Florida Underwriting
Underwriting Bulletin 2010-23
Page 2
Recently, there have been a number of significant developments regarding foreclosures that lead us to the changes set forth below. These developments include, but are not limited to: (1) Freddie Mac and Fannie Mae have issued new instructions mandating that its servicers review all pending foreclosure proceedings to ensure compliance with applicable law; (2) certain state courts have adopted new rules to police foreclosure practices; (3) other state courts have required foreclosure attorneys to file written affirmations that they have used reasonable steps to verify the accuracy of the foreclosure papers: and (4 ) major institutions have voluntarily suspended foreclosure proceedings to conduct reviews of their practices to ensure compliance with applicable law. In light of these heightened review procedures, the Company is modifying its Foreclosure Bulletin Number 2010-21 dated October 22, 2010 as follows:
Lenders and/or Servicers with which Fidelity has entered into a Master Indemnity Agreement
The Company’s general policy is that when insuring titles derived through foreclosure proceedings, the same must be regular as to form and in compliance with local law and practice. As noted in the prior bulletin, Bank of America and its affiliates (“BofA”) have entered into a master agreement with the FNF Family of Companies which facilitates the underwriting process of insuring sales in which BofA is the lender or servicer. All offices and agents of the Company may continue to insure the purchaser of a REO (bank owned) property from BofA or from the assignee of BofA wherein BofA is identified as the foreclosing lender or servicer.
In the future, there may be other lenders with which the Company enters into master indemnity agreements. You will be advised when this occurs.
Of course, the indemnity agreement is not a substitute for your standard examination of the foreclosure proceedings.
Lenders and/or Servicers with which the Company does not currently have a Master Indemnity Agreement
The Company will not require an indemnity agreement for individual transactions provided that a review of the foreclosure proceedings does not disclose any procedural deficiencies. Attached hereto is an underwriting bulletin from your state counsel which sets forth in detail local underwriting requirements for insuring transactions derived through mortgage foreclosures.
Subsequent Resales or Mortgage Transactions
The FNF Family of Companies will continue to insure subsequent resale or mortgage transactions where the grantor or mortgagor was a purchaser of REO property, as long as at the time of the present transaction there are no known or pending claims against the property or the prior policy and it is insured by an owner’s policy issued by the Company or issued by an acceptable non-family insurer.
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Exhibit A
FIDELITY NATIONAL TITLE GROUP
FLORIDA
UNDERWRITING GUIDELINES FOR INSURING AFTER
MORTGAGE FORECLOSURE
October 26, 2010
When insuring the purchaser at a mortgage foreclosure sale, or when insuring the purchase of property from the successful bidder who acquired title through foreclosure, the following guidelines apply:
1. Examination of the Foreclosure Docket Sheet and Recorded Documents - In all cases, at a minimum the court’s foreclosure docket and documents pertaining to the foreclosure which have been recorded in the official records (i.e., lis pendens, final judgment of foreclosure and certificate of title) must be examined to verify that:
a. The correct legal description was used on the lis pendens, final judgment of foreclosure and certificate of title.
b. The plaintiff in the action is: (1) the record holder of the mortgage being foreclosed; or (2) has filed the original promissory note in the foreclosure file; or (3) has obtained a final order reinstating the lost promissory note.
Notes: If the plaintiff is not an institutional lender, an order reinstating a lost promissory note should not be relied upon unless the holder of record of the mortgage is named as a defendant.
c. The owner(s) of the property and all junior encumbrancers as reflected in the title search were named as defendants.
d. All defendants were either served or filed an answer. If service was by publication, the docket must show that personal service of process was attempted, and an affidavit in support of construction service and proof of publication must be filed. If the amount of insurance will exceed $500,000, the return of service and, where applicable, affidavit in support of constructive service and proof of publication for each owner and each junior encumbrancer having a lien of $10,000 or more who did not file an answer must be reviewed for sufficiency.
e. Judgment was entered, notice of sale was published and a certificate of title was issued.
f. No appeals, motions to reopen or motions to vacate the judgment, certificate of sale or certificate of title have been filed.
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For each file examined, the attached form must be fully completed and signed by the reviewer and kept in the office file.
2. Time periods – The foreclosure sale cannot be held less than twenty (20) days after the foreclosure judgment. The notice of sale is required to be published once a week for two (2) consecutive weeks. The second publication must be at least five (5) days before the sale.
3. Standard exceptions – Standard underwriting rules apply in removal of standard
exceptions (parties in possession, construction liens, survey matters). The standard title affidavit may be used, provided it is obtained from a competent affiant. If unavailable, the exceptions may not be deleted.
All other usual underwriting practices should apply. Any questions should be directed to your local underwriter.
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MORTGAGE FORECLOSURE REVIEW CHECKLIST
1. File References. Agent’s: _____________________ Company’s: ________________
2. Property:_________________________________________________
3. Circuit Court of: _______________________________________
4. Case / Docket Number: ____________________________
5. Plaintiff: _____________________________
Note: ‘Yes’ must be checked to one of the following options:
a. Is Plaintiff the record owner of the mortgage? ___Yes ___ No
b. If not, was the original promissory note filed in the foreclosure? ___ Yes ___ No
c. If not, was an order entered re-establishing the lost note? ___ Yes ___ No
(If Option c. was checked and the Plaintiff is not an institutional lender, the record ownerof the mortgage must be named as a defendant.)
6. Defendants /Service of Process:
Name Nature of Interest Service of Process
Answered Personal Constructive or Substit.
Service
_______________ ________________ __________ ____ ____________
_______________ ________________ __________ ____ ____________
_______________ ________________ __________ ____ ____________
_______________ ________________ __________ ____ ____________
Note: For constructive service, the docket should contain a service return showing that personal service was attempted unsuccessfully, an affidavit in support of constructive service (affidavit of diligent search) and proof of publication.
7. Was record owner deceased? ___ Yes ___ No If Yes:
Was a probate found? ___ Yes ___ No
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If no probate found for deceased owner, was a title search conducted to find a probate in subject county, surrounding counties or other counties connected
to the decedent? ___ Yes ___ No
Were all known heirs /beneficiaries of the deceased owner
named as defendants? ___ Yes ___No
Was any acting personal representative named as a defendant? ___ Yes ___ No
If no probate was found, was the class of unknown heirs/
beneficiaries named as a defendant? __ Yes ___ No
Were Company guidelines followed as to appointment
of guardian/attorney ad litem? ___ Yes ___ No
8. If there were non-appearing defendants who are natural persons, was there proof
that they were not in military service as required by the Servicemembers’ Civil Relief Act?
____No __Yes
9. Legal description. Was legal description correct on?
Yes No Comments
Mortgage ___ ___ _______________
Lis Pendens ___ ___ _______________
Final Judgment of Foreclosure ___ ___ _______________
Certificate of Title ___ ___ _______________
Other court case documents reviewed ___ ___ _______________
Note: If legal description was incorrect on any of the above documents, the complaint must be obtained and reviewed and underwriting assistance obtained.
10. Final Judgment of Foreclosure.
Date of judgment: ____________ Amount: _______
Does it recite that the Plaintiff’s interest is superior to that of all defendants?
___ Yes ____ No Indicate any superior interests referenced in the final judgment:
________________________________________________________________________
11. Jurisdiction.
Was the foreclosure in the county in which all (or some)
of the property was located? ___ Yes ___ No
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If the mortgaged property was in more than one county, was the
notice of sale published in each county? ___ Yes ___No
12. Time Periods.
Foreclosure sale held at least 20 days after foreclosure judgment? ___ Yes ___ No
Notice of sale published once a week for 2 consecutive weeks? ___ Yes ___ No
Second publication at least 5 days before the sale? ___ Yes ___No
13. Any indication of a redemption?
__ No
___ Yes. Satisfaction of judgment filed _____________.
Redeeming party was ___________ who redeemed on ___________.
14. Any indication of a bankruptcy?
__ No
__ Yes Bankruptcy court district: _______________________
Case number: _______________________________
Date of order granting relief from automatic stay: ______
15. Any motion(s) to re-open or set aside?
__ No
__ Yes Filed by _____________ on ________________.
Ruling? _____ Denied on _____________.
_____ Granted on ____________.
16. Any indication of an appeal?
__ No
__ Yes Appeal filed by _____________ on ______________
appealing from which ruling? _____________________
_____________________________________________.
17. Special concerns: An appropriate exception must be made to the extent the property is subject to condominium association or homeowners’ association assessments.
18. Is there another foreclosure proceeding pending to foreclose another mortgage or lien?
___ No
___ Yes Case No. and Status: _________________________________________
19. For residential properties, an exception must be made as follows: The rights of tenants in possession under bona fide leases pursuant to the provisions of the Federal “Helping Families Save Their Homes Act (2009)”.
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EXAMINER’S SUMMARY
A. After review of the docket sheet and any other required
documents were there any defects in the foreclosure proceedings? ___ Yes ____ No
The defects are set forth in Item(s) _________________________
above or are as follows: __________________________________
_____________________________________________________.
B. Were there any challenges to the sufficiency or validity
of any affidavits filed in the foreclosure proceeding? ___ Yes ___No
If the answer to Items 13, 15, 16 or 18 is ‘Yes’, that Item must be discussed with underwriting.
If the answer to Item 14 is ‘Yes’ and there is no order granting relief from the automatic stay, that item must be submitted to underwriting with the commitment, pertinent documents and this checklist .
If the answer to A or B above is ‘Yes”, this checklist, the proposed commitment (if prepared) and the pertinent documentation must be submitted for review and approval by the underwriting department.
By: ________________________
Examiner
______________________________________________________________________________
Approved: ____________ Denied: ____________
Date: _________________
File No.: ______________
Agent’s File Reference: _______________
Conditions for the Approval:
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________.
Fidelity National Title Group
By: _________________________
Underwriter


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