Commercial Real Estate Blog by Madison
Tag Archives: title insurance

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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The Pervasiveness of Mortgage Fraud – Forged Documents

By Debra Smith, Associate General Counsel, Madison Title Agency

Mortgage fraud is pervasive. This is the first of a series of blogs describing different types of mortgage fraud and the flags that can help anyone involved in the real estate and financial sector identify them.

One fraud seen with increasing frequency is forged mortgage satisfactions. A major example of this type of fraud occurred in 2005 in Greenwich, Connecticut. A respected real estate developer owned a number of commercial properties. It turns out that to generate more cash flow, he was routinely forging mortgage satisfactions of mortgages encumbering properties he owned. Continue reading

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Isn’t it Time to Jettison Adverse Possession Laws?

By Terence Guerriere, Esq., Executive Vice President, Madison Commercial Real Estate Services

Adverse possession is a method of acquiring title to real property by possessing it for a statutory period under certain conditions. The doctrine of adverse possession has been a part of American law since the founding of our country; a precept of western civilization’s legal system for centuries. However, perhaps it is time to recognize that the idea that an owner of real property should lose title to his land, simply because someone else has been using it, is a relic of the past.

The primary reason for the development of adverse possession law was to promote the productive use of property. If an absent owner did not tend to his land, the land would not produce food or other benefits for society. This certainly made sense during the time of an agrarian society. Today, however, there is little fear that we would not be able to feed, clothe and house our citizens by allowing land to lay fallow.
Is it time to lift the burden from the land owner of record and shift it to the possessor of land he doesn’t own?
Continue reading

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Museum of Title Insurance – An Idea Long Overdue!

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

I’m going to be brutally honest. I am tired of friends and family asking me for stories about the world of title insurance. I know their intentions are good and I appreciate the curiosity. But enough is enough. The straw that broke the camel’s back was this past Thanksgiving. It’s become a tradition in my family that the youngster’s sit me down after dinner to share tales of the title year that was. But this year, when the dinner discussion turned to the history of the industry, I was done. Folks, I am a title professional – not a tourist attraction. And so I put my frustration into action and came up with an idea that is long overdue, “The Museum of Title Insurance”.

I’ve narrowed down location to two possibilities, Chicago, Illinois or Philadelphia, Pennsylvania. Each location is based on a real estate transaction that led to the establishment of the title insurance industry. 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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Potential Pitfalls in DIY Deals in Real Estate

By Elliot Zaks, Principal, Madison Commercial Real Estate Services

Do-it-yourself projects may be a worthy endeavor for a handy homeowner refinishing a deck or a green thumbed gardener installing a herbaceous border. However, in the complex world of real estate transactions, DIY measures may backfire. Buyers seeking to cut costs with DIY methods can miss out on some vital resources.

The residential home market is experiencing a shift in attitudes. Rising interest rates and stiff credit requirements are causing a slow down in residential mortgage lending, as buyers struggle to get home loans. Rather than submit to the strict rules of the banks and creditors, many home buyers are turning to all cash deals. While cash buyers have the advantage of evading lender’s regulations, they should be careful not to forego essential industry safeguards. Continue reading

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Appeals Court Addresses Insurer’s Duty to Defend

By: Debra Smith, Esq., Associate General Counsel, MCRES

In a recent case, K2 Investment Group, LLC, et al. v., American Guarantee & Liability Insurance Company, 21 N.Y. 3d 384, 993 N.E. 2d 1249, 917 N.Y.S. 2d 229 (N.Y. Ct. App. 2013), the New York Court of Appeals addressed the duty of an insurer to defend its insured. Even though this case did not involve title insurance, it will likely be cited in title and other insurance litigation involving the duty an insurance company has to its insured.
In this case, the plaintiffs made loans to be secured by mortgages. Following default, the plaintiffs commenced an action against various parties, including Jeffrey Daniels, a lawyer, for legal malpractice. The insured tendered the claim to his malpractice carrier, American Guarantee & Liability Insurance Company. The complaint contained allegations that the insured was a principal of the borrower. The plaintiffs alleged that the insured failed to record the mortgages and obtain title insurance. American Guarantee denied the claim and did not tender a defense based on a policy exclusion for claims arising out of an insured’s actions undertaken in his capacity as a member or owner of a business enterprise.
Here is the Court’s decision. Continue reading

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Title Guys in Cars talking Hockey… and Prescriptive Easements

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

As a young boy, there were three things I enjoyed most… hockey, cars and title insurance. Even to this day, I keep myself busy with these same interests. In the spirit of Jerry Seinfeld’s melding his interests into a web-only show, “Comedians in Cars Getting Coffee”, I thought I would take a shot at blogging about these three loves of mine.

I was about eight years old when hockey became my passion. It started with collecting hockey cards, playing road hockey and becoming a fan of the three-time Avco Cup champion Winnipeg Jets. (That’s right. Google it!) All the while I was studying the intricacies of title insurance while obsessing over my very first love, the automobile.

One day in the fall of 1977, my buddies and I were playing a game of street hockey in a nearby public park we frequented quite often. As was the norm, an angry neighbor came to protest for the umpteenth time that our puck (read tennis ball) landed on his property. Needless to say, I could think of only one thing: the recent decision in the matter of MacDonald Properties, Inc. v. Bel-Air Country Club , 72 Cal.App.3d 693 [Civ. No. 49715. Court of Appeals of California, Second Appellate District, Division Two. August 15, 1977.] The case involved prescriptive easements… Continue reading

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Down to Details: Understanding Endorsements in Title Insurance

By Michael Donini, Esq.

While time may not always allow an attorney to read through every detail of the boilerplate title insurance policy, a skilled practitioner should definitely know the exact details of the customized portions of the policy and the scope of the title insurance coverage given by endorsements. Why? Because a full understanding of policy endorsements and their benefits will ensure a client’s proper title insurance coverage. Continue reading

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New Title Insurance Alliance – Is It A Game Changer?

By Michael Donini, Esq.
Senior Commercial Counsel, Madison Title

Earlier this summer, five regional title insurance underwriters reported their decision to join forces and form the American Title Reinsurance Alliance (ATRA). The Agents include National Title Insurance, Alliant National Title Insurance, Attorneys’ Title Guaranty Fund, Connecticut Attorneys Title Insurance, and Security Title Guarantee—and more may be joining the fold.

What’s behind this alliance, and what are the pros—and cons? Is it a game changer? Continue reading

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