Commercial Real Estate Blog by Madison
Tag Archives: title insurance policy

Let’s Go CFPB!

By Sam Shiel, Esq., Director of National Title Services and Senior Underwriting Counsel, Madison Title Agency

At the time of this writing, the Green Bay Packers are heading to the NFL playoffs with a record of 10-6. While the team’s record is reason for most Packer fans to rejoice, certainly there are some fans with more on their mind. Specifically, members of the Orlando-based fan club, the Central Florida Packer Backers (CFPB). But for those members of the CFPB purchasing a home in Florida, “fun” is hardly the word that comes to mind these days.

Since September 2, 2014, home purchasing members of the CFPB, along with all other Florida home purchasers, have been subject to an additional title charge of $3.28. Why? It is to pay for the multimillion-dollar collapse of an Orlando title company.

Back in 2007, a Florida law firm formed a title company by the name of KEL Title Insurance Group (KEL) headquartered in Orlando – much like the CFPB. The company had written in excess of 10,000 title insurance policies. However, in October 2012, KEL was ordered into receivership for purposes of rehabilitation by the Courts. The partners of the law firm have denied any wrongdoing, blaming KEL Title’s problems on a fraud scheme by an unidentified rogue agent in South Florida who allegedly fabricated sales and stole escrow money. While KEL is no longer writing new or renewal insurance coverage, the company’s existing policies are not cancelled by the rehabilitation order and will continue in the ordinary course of business.

The result. Just months after the takeover by the state, KEL policy claims are skyrocketing and its cash is nearly gone Claims soared as homeowners discovered flawed sales closings and bogus title insurance sales. When the state took over in 2012, KEL had claim liabilities of $12.8 million and cash of $2.7 million, according to state records.

The solution?…. Continue reading

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Measure Twice, Close Once – The Importance of Accurate Survey Readings

By: Joseph Kipper, Senior Underwriting Manager, Madison Title

The old saying, “Measure twice, cut once”, certainly is useful for carpenters. One should double check measurements for accuracy before cutting a piece of wood, rather than rushing to cut and making errors which waste material. Aside from carpenters and tailors, there are other industries where accurate measurements are of supreme importance. Before purchasing real estate, it is important to obtain and examine the exact measurements of the property. Here’s why. Continue reading

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What are the Obligations of an Insured who Files a Title Insurance Claim?

By: Debra Smith, Esq., Associate General Counsel, Madison Title Agency

A recent Connecticut case, Chicago Title Ins. Co. v. Bristol Heights Associates, LLC, 142 Conn. App. 390, 70 A.3d 74 (Conn. App. 2013), cert. den. 309 Conn. 309, 68 A.3d 662 (Conn. June 20, 2013), underscores the importance of understanding your title policy when you file a claim with your title company. In this case, Bristol Heights Associates, LLC (“Bristol”) filed a claim for unpaid taxes covering a period prior to the date it acquired title to the property. These taxes were missed by the title company. The individual that sold the property to Bristol became a member of Bristol at the time of the conveyance. There were questions as to whether seller’s knowledge of the taxes could be imputed to Bristol, since the seller became a member of Bristol. Continue reading

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Real Estate Closing Costs in New York State and New York City

By Pat Anarumo, Vice President of Sales, Madison Commercial Real Estate Services

Your closing date has finally arrived. You are ready and armed with your checkbook. Still, you are shocked when you discover how much it costs to finally close the deal. Everybody has their hand out; the tax man, the recorder, the lender (assuming that you are not full of cash) the title company, your lawyer, and don’t forget the broker.

It helps to look at what gets paid on a typical NYC condo purchase from the seller’s perspective, and then the buyer’s perspective. Here is a breakdown. Continue reading

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Underwriter Fidelity Title Changes the North Carolina Real Estate Landscape

By Samuel M. Shiel, Esq.,
Director of National Title Services and
Senior Underwriting Counsel, Madison Title Agency

In my February 16, 2011 blog post, I addressed the decision that major underwriters made to end the practice of removing the creditor’s rights exception from their policies. This changed the practice of negotiating the removal based on significant financial analysis. It was with great intrigue that I followed that development within the real estate industry.

Now, a little over a year later, we are seeing yet another significant change to real estate title by one title insurance underwriter. After many years of significant loses on Mechanic’s Lien claims in North Carolina, the Fidelity Title Insurance Group, parent company of Fidelity National Title, Chicago Title and Commonwealth Land Title, announced on May 10th that they would no longer issue Mechanic’s Lien coverage for title commitments issued after June 15, 2012. (See their letter below.) Fidelity is also placing restrictions on the effective date of endorsements for previously issued policies. Why this change and why now? Continue reading

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Farewell to Creditor’s Rights

Within the last year, all the major title companies have opted to end Creditor’s Rights coverage for both owner’s and lender’s policies. The coverage protected the insured from risk in connection to a bankruptcy by either the selling party or by a borrower. Going forward, the parties, and in particular the banks, will need to analyze the risks independently to determine if there are fraudulent or preferential conveyance issues, rather than rely on title insurance coverage. Continue reading

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