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Obtaining Payoff Statements Directly from the Lender

Looking to avoid title claims related to unpaid mortgages and deeds of trust? We offer 4 tips

Our Claims Team has received various claims related to unpaid mortgages and deeds of trust. Here are two scenarios we have seen arise in the context of a claim:

Scenario One

The agent receives a payoff statement from the seller. The seller sends an email requesting the payoff from the lender and copies the agent on the email.

The agent relies on the email and the payoff statement to wire funds to the lender.

Later, it is discovered that the email address for the lender is fake, and the bank account receiving the payment was held by the seller, not the lender.

Scenario Two

The agent reaches out to the lender for a payoff statement. However, the closing date is approaching, and the lender has not responded.

The seller provides the agent with a printout showing a zero-balance owed on the account. The agent contacts the lender once again for a payoff statement.

The lender confirms over the phone that a zero balance is owed. The agent closes the transaction based on these representations.

Later, it is determined the original lender confirmed a zero-balance due because the loan had been sold to another lender.

An assignment of the mortgage had been recorded, and the current holder of the notes filed to foreclose.

Here are 4 tips to help you avoid these types of claims:

  1. Always obtain a payoff statement directly from the lender. Do not rely on payoff statements provided by other parties. Your request for a payoff should include a letter of authorization from the borrower, the loan number, the property address, the borrower’s name and your fax number or email address.
  2. Only rely on a payoff statement sent by the current holder of the note. Check the MERS system, (if the mortgage is a MERS loan), and the public records for the last assignee.
  3. Be mindful of working with hard money lenders – hard money lenders may assign their interests off the record. (See Bulletin 2017-02 and Claims Title Tip dated September 18, 2017 discussing hard money lenders .)
  4. Obtain separate payoff statements directly from each lender with an interest in the property being sold or refinanced. Do not rely on representations from the borrower or other institutions regarding the balance of a loan.

Claims Department Creates Taco Night for Ronald McDonald Families

The Claims Department recently paired up with the Ronald McDonald House Charities as part of their annual campaign to give back.

Ronald McDonald House Charities provides support to children and their families at hospitals worldwide by providing a place to stay, and home-cooked meals, at little or no cost.

This service allows families to focus on the health and healing of their child, instead of having to worry about groceries, shopping, cleaning and cooking.

The Claims Team paid a visit to the Ronald McDonald house in Orlando and prepared a home cooked meal of tacos with all the fixins. Photos from their time volunteering in the kitchen are on display in the slideshow below.

Ronald McDonald’s policy is that no family is ever turned away — fees are waived for families that cannot afford to make a donation.

Please visit the donation page to give to your local Ronald McDonald House Charities chapter, or to other chapters located across the globe.

  • Service
  • Meal Prep2
  • Meal Prep
  • Meal Prep4
  • Meal Prep5
  • Meal Prep3

Claims Stories: A Naked Release Should Trigger a Red Flag

In our continued effort to keep our agents and escrow officers apprised of trends in the Title industry, our claims counsels and administrators have provided the following claim summaries. It is our goal to share these stories and help you avoid similar scenarios in the future. In this article, we will focus on Naked Releases.

A naked release is a release of a lien or mortgage that is not done in connection with a sale or refinance transaction. These releases are a red flag and merit further investigation. Naked releases often involve forgery which are expensive to resolve and cause significant losses.

Here’s how it played out:

Claims Stories: Be Skeptical of a Recently Recorded Quit Claim Deed

In our continued effort to keep our agents and escrow officers apprised of trends in the Title industry, our claims counsels and administrators have provided the following claim summaries.

It’s our goal to share these stories and help you avoid similar scenarios in the future. In this installment, we will focus on Quit Claim Deeds. Here’s how it played out:

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