In the first quarter installment of The Legal Descriptionís Quarterly Case Law Report, we analyze court decisions that impact the title insurance and settlement services industries and share those court opinions with you.
The first quarter saw courts still sorting through the foreclosure and robosigning mess that plagued 2011. This includes three cases that were appealed to the 10th U.S. Circuit Court of Appeals. In these cases, the third-party buyer of three pieces of property in Utah, who purchased the property from defaulting borrowers, sued the various defendants who held interests in the property, seeking to prevent foreclosure. The company argued that the defendants had no authority to foreclose because the notes had been securitized, necessitating the approval of each investor in order to foreclose. The purchaser eventually appealed the decision to the 10th Circuit.
County recorders began filing complaints against MERS as well, in an attempt to recover recording fees they feel they are owed. A judge in Kentucky has become one of the first judges to render a decision in these suits against MERS and other related entities. More decisions will be rendered soon.
Arbitration is an important tool in the title insurerís toolbox to address claims. However, a class of homeowners in New Jersey were able to move their case forward without arbitration until after the U.S. Supreme Court decided that the Federal Arbitration Act preempted a California law regarding the unconscionability of arbitration waivers. After the decision was rendered, the title insurers moved to compel arbitration in the U.S. District Court for the District of New Jersey.
Answering a question that has plagued trial courts in Virginia, the state supreme court ruled that title insurance companies operating in the state may sue under a surety bond issued as required under the Virginia Consumer Real Estate Settlement Protection Act.
Analysis of these and other important decisions can be found in this 31-page PDF special report.
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