Kevin,

"Problems with title would have surfaced long before foreclosure, and would need to have been rectified before the lender would grant a mortgage."

Not entirely true. With the numerous letters of indemnity and the quick turning refi market. Mistakes are not going to be caught, much less are they going to be corrected when they are caught.

"Lender insists on title insurance at the time of purchase and each refi. Title insurers again order title search to determine the state of title they are required to insure."

Those $8.00/hr lender underwriting clerks don't know title from titlist golf balls.
Title insurers do order searches again, yes you are correct. They are lazy and order a current owner search or have a standing order that any refi done within X amount of years ago will only have a 5 year search etc, etc. Or some Companies go as far to say if XYZ title company shows up in the chain of title, stop there, we have an indemnity agreement with them...


"There are not many defenses to a foreclosure action (fraud, release, payment, etc.). if a borrower is unable to pay his mortgage, it is not likely that a claim for title defects is going to help. By that time the title has probably been searched ad nauseum  , and a defect in title would have long since surfaced. "

I'm going to attempt to argue matters of law since you are infinitely more adept than I at those matters, but... I object as to the title being searched ad nauseum (amazes me how poor a speller you are and you cranked this one out. ) j/k Kevin.

Consider this:
XYZ Servicing Group (Litton Loan Servicing) Owns 40 billion in paper. 1% of that paper goes South. What is that? 400mil right? Say an average of 150k per house. 2,666 homes. Anyone care to quote the title defect rate?

Firstly, Litton buys a priority search from a company called Safeguard Properties in Cleveland Heights, Oh. (I know cause I used to do them) Safeguard charges $150.00 to the client. (Litton)
Safeguard pays the abstractor anywhere from $35.00 to $65.00 for the search. Litton tries to find a reason to sell back the loan to the originator or prior owner. If not, they initiate proceedings based upon the one search.
(I specifically worked for Eric Solowich, the attorney that initiated those proceedings). So little title evidence was done it was purely amazing. Once things went to court, we found missed mortgages, missed satisfactions, you name it. My point is Kevin, I don't think the due dilligence is being done by very many parties of these transactions anymore at all.

Mortgage brokerages and wholesalers are going under on a daily basis. Not from just writing bad paper, but funding paper with Judgments. Did you know that there are lenders that will fund a loan with a judgment as long as it doesn't show on title?

Even though the loan officer sees the judgment on the credit bureau, if you dont show it on your title report, the lender will fund it. That is how the title company gets pinched. I personally would try and go after the LO for having knowledge, but that's your arena.

I think your opinion is based mostly on A paper conforming bank owned junk. The truth is now, the majority of paper in the US is non conforming brokered paper. It's essentially a crap shoot.