As America and now the world struggles to come to grips with the breadth and magnitude of Foreclosuregate, I urge everyone to read the very important letter below. This should help everyone to understand just what we are dealing with. After you read this indictment of our current foreclosure system, read the attachment below which are the letters Florida Attorney General just sent out to lenders across this country…it illustrates the terrible disconnect we now suffer…..
From a title standpoint the false affidavits and assignments are serious indictments, which when followed up the chain will reveal the fact that a horrible disconnect has happened to the usual, well balanced, real party in interest v. real party in interest relationship in contract relations. The foreclosing entities are disconnected proxies who feel no direct responsibility to the faceless horde of investors who own the loan. The proxies failure to disclose the real party in interest for whom they purport to act fails the legal chain of title needed at the get go. And it only gets worse as the case progresses leaving a broken chain and a dark cloud on title in the record The drive to cut corners and take short cuts with the law cannot be ignored by a thinly financed insurance industry whose low rates were adopted years before the advent of the securitized/MERS mortgage device.
It’s not so ironic that the business model employed now to enforce these mortgages is as sloppy in execution as the one that manufactured and sold these mortgages in the first place – and that is assuming the best of intentions.
Problem is, that title law does not like sloppy, nor should it insure it. Nor can it, really.
Title Integrity was risked, without risk premium, in the creation of these troublesome devices, then doubled down by insuring their horrible offspring.
And now we are beginning to see this downstream folly in action. The poorly written Taylor decision is a case in point.
Erroneous court decisions, and their failure to properly apply the law litter the vast landscape of our legal history. Reversals of our U.S. Supreme Court, by itself, years or decades later, is proof.
We in the world of transactional/title law and insurance follow a different tune than the drumbeat of the latest questionable appellate decision. We know that the vast majority of the judges sitting on benches never closed a real estate transaction nor searched and put together a title chain, nor could they spot a cloud or defect. They certainly don’t know the difference between insurable versus marketable title.
But the market does.
We deal in a delicate and extremely conservative area of the law developed over nearly a 1,000 years of practice, process and tradition; We carry the history and weight of that developed law and its solid logic into the most important aspect of any transaction – the fundamental bedrock assumption underpinning its successful completion: clear and marketable title.
Every buyer presumes it.
But it does not exist in the context of these mass foreclosures, and remains in question as to those loans still out there, not yet in default.
So we do not accept bad or illogical decisions of courts if it conflicts with our learned perception of the law and acceptance of a risk assessment. We cannot be forced to write title.
But if we don’t write title most of the modern real estate world and our economic system will grind down to a halt.
Taylor’s presence now as bad precedent gives no shelter or safe harbor for any title underwriting decisions foolishly based on it. Instead it stands out like a sore thumb, a poster boy for a decision based on expediency not law or logic.
And the recent moratorium on foreclosure should be viewed as the smoke coming from a very serious fire.
Jurists Engaged in Defending Title Integrity