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The Legal Description Edition
July 21, 2014
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NAIC exposes draft guidelines for guaranty fund
Posted Date: Monday, July 14, 2014
In response to title insurer insolvencies that have happened in the last few years, industry members and regulators alike have been finding ways to address these problems and provide continued coverage for the banks and consumers that hold title insurance policies from these insolvent insurers.
While only 25 underwriters have gone insolvent since 1985, according to a Title Insurance Guaranty Fund Working Group report, regulators are concerned about the reduced number of title underwriters nationwide and what would happen if one of the four largest title insurance groups went insolvent. Over the past year the Title Guaranty Fund Working Group of the National Association of Insurance Commissioners worked with state regulators and interested parties to develop guidelines to crafting a guaranty fund that states could adopt for use in their jurisdictions. It released an exposed draft on July 8 for comment by all parties.
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A cautionary tale: Bank not liable for cyber theft, says 8th U.S. Circuit
Posted Date: Wednesday, July 16, 2014
An escrow company from Missouri can now be held up as a cautionary tale for other companies to do all they can to protect their escrow funds from cyber theft. After internet fraudsters stole $440,000 from their escrow account, they sued their bank to recover the lost funds. The bank counterclaimed for attorney’s fees. The district court held that the escrow company should bear the loss of the funds from its account.
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Insured demands return of collateral used to indemnify third deed of trust
Posted Date: Tuesday, May 27, 2014
In order to refinance his property, a California man had to sign an indemnity agreement, promising to indemnify his title insurer against any claims incurred regarding the property. He also had to provide $87,500 as collateral. Later, he demanded that collateral back. When the title insurer refused, the owner filed suit.
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Tax sale issues lead to subrogation dispute
Posted Date: Tuesday, May 27, 2014
In an action begun by tax sale purchasers to quiet title to property, the other purported purchaser of the property brought action against his mortgagee, lender, attorney and title insurance company arising out of a failed purchase. The trial court granted summary judgment to the defendants and the purported purchaser appealed.
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Industry applauds confirmation of new HUD secretary
Posted Date: Thursday, July 10, 2014
The U.S. Senate confirmed the appointment of San Antonio Mayor Julian Castro to lead the U.S. Department of Housing and Urban Development. Industry members were quick to voice their approval for the new HUD head.
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Maryland settlement agents sentenced for roles in mortgage fraud conspiracies
Posted Date: Tuesday, July 8, 2014
U.S. District Judge James Bredar sentenced Rhonda Scott, 52, of Oxon Hill, Md., to 30 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with two separate mortgage fraud schemes which resulted in losses of more than $2.5 million. Judge Bredar also entered an order that Scott forfeit $2.7 million and pay restitution of $703,000.
Judge Bredar also sentenced co-defendant Niesha Williams, 34, of Fort Washington, Md., to 27 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with one of the mortgage fraud schemes. Judge Bredar also ordered that Williams forfeit $3.1 million and pay restitution of $1,445,593.
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N.J. attorney pleads guilty to mortgage fraud conspiracy
Posted Date: Tuesday, July 8, 2014
A former N.J. lawyer admitted he conspired to participate in a scheme that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and conspired to launder the proceeds of the fraud, U.S. Attorney Paul Fishman announced.
Joseph Witkowski, 68, of Flemington, N.J., pleaded guilty before U.S. District Judge Joseph Irenas in Camden federal court to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. Witkowski, a former attorney, was released on bail.
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Pennsylvania considering mechanic’s lien law revision
Posted Date: Tuesday, July 8, 2014
The General Assembly of Pennsylvania is considering a bill that amends the state’s mechanic’s lien law by providing a definition of “cost of construction,” providing for the right to lien, for priority of lien and for discharge or reduction of lien on payment into court or entry of security.
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Property valuation fraud risk up in latest quarterly report
Posted Date: Thursday, July 3, 2014
Interthinx, a subsidiary of First American Financial Corp. and a provider of comprehensive risk mitigation solutions for the financial services industry, has released its quarterly interactive Mortgage Fraud Risk Report covering data collected in the first quarter of 2014.
In the first quarter of 2014, the national Mortgage Fraud Risk Index value was 100, the same value as it was a year ago and down 1 percent from Q4 2013. The national Property Valuation Fraud Risk Index is 128, up 27 percent from last quarter and 17 percent from a year ago. Indicators suggest this increase is driven by persons in certain areas purchasing and listing multiple properties in the same neighborhood. By controlling those markets, these persons have the ability to artificially control the price of a property to their advantage. Another contributing factor observed is the rise of properties being appraised well above traditional valuation thresholds.
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FFIEC launches Web page dedicated to cybersecurity
Posted Date: Thursday, July 3, 2014
The Federal Financial Institutions Examination Council (FFIEC) launched a Web page on cybersecurity (www.ffiec.gov/cybersecurity.htm).The Web page is a central repository for current and future FFIEC-related materials on cybersecurity.
While information security has been a core focus of supervision for decades, the FFIEC members are taking a number of steps to raise awareness of cybersecurity risks at financial institutions and the need to identify, assess and mitigate these risks in light of the increasing volume and sophistication of cyber threats that pose risks to all industries. The FFIEC Web page provides links to joint statements, webinars and other information that may help financial institutions when thinking about the issue of cybersecurity.
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Alliant National Title implements data security education tool
Posted Date: Tuesday, July 8, 2014
To improve employee knowledge on protecting client information, Alliant National Title Insurance Co. has engaged Real Estate Data Shield to provide training sessions on data privacy and security across its 10-state operating area.
The required training arms employees with a keen awareness of the laws, regulations, and regulator expectations relating to safeguarding non-public personal information.
“Everyone at Alliant National is being trained in data security, privacy and best practices,” said Chief Information Officer David Sinclair. “We are taking these steps to ensure clients’ non-public personal information is properly protected in our offices and networks.”
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Fifty years for Illinois’ Attorneys’ Title Guaranty Fund Inc.
Posted Date: Thursday, July 3, 2014
Founded 50 years ago by a small group of downstate Illinois lawyers, Attorneys’ Title Guaranty Fund Inc. (ATG) has evolved into a family of companies offering a broad spectrum of services to more than 4,000 lawyers in Illinois, Indiana, Wisconsin and Michigan. The company now garners revenue in excess of 100 million annually and will issue its three millionth title insurance policy this year.
“Our 50th anniversary is a celebration of our founding members and the thousands of law firms and agents who have together built the company into the success it is today,” said Peter Birnbaum, ATG president and chief executive officer. “It’s also a celebration of our staff — loyal stewards of the company who believe in our mission to be the premier lawyer service organization for the benefit of the public.”
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Kansas court gets new case management system
Posted Date: Thursday, July 10, 2014
On June 20, the Shawnee, Kansas Municipal Court went live with a new case management system that increases the quality of service to the public, streamlines court processes, and will deliver a substantial long term return on investment for the court and the city.
“The city’s partnership with Pioneer Technology Group (PTG) has been very positive, and the Benchmark system has greatly streamlined our workflow,” said Stephen Powell, city clerk in Shawnee. “Benchmark allowed us to become one of the first municipal courts in the state to go paperless, has saved a considerable amount of staff time, and allowed the court to provide better, more reliable, customer service.”
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Four convicted of bank, wire fraud conspiracy
Posted Date: Thursday, July 10, 2014
Wifredo Ferrer, U.S. attorney for the Southern District of Florida, George Piro, special agent in charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Jason Moran, special agent in charge, Federal Deposit Insurance Corporation (FDIC), Office of Inspector General, Atlanta Regional Office, announce the convictions of Domenico “Dom” Rabuffo, 77 of Miami, Mae Rabuffo, 75, of Fort Lauderdale, and Williston Park, N.Y., Raymond Olivier, 52, of Land O’ Lakes, and Curtis Allen Davis, 51, of Tampa. The defendants were convicted after an 11 day-jury trial before Chief U.S. District Judge Kevin Michael Moore. The jury found each defendant guilty of conspiracy to commit bank fraud and wire fraud affecting a financial institution, in violation of Title 18, U.S. Code, Section 1349. The jury also convicted Domenico Rabuffo, Olivier and Davis of multiple counts of bank fraud, in violation of Title 18, United States Code, Section 1344.
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Fraudster found guilty in Operation Wax House
Posted Date: Thursday, July 3, 2014
A federal jury delivered a guilty verdict on June 26against a Charlotte, N.C., man in connection with a $75 million racketeering conspiracy, announced the U.S. Attorney’s Office for the Western District of North Carolina. Following a three-day trial, Steven Jones, 46, was convicted of racketeering conspiracy, securities fraud, wire fraud scheme to defraud investors and money laundering conspiracy.
This conviction is the latest in Operation Wax House, an investigation which began in 2007 and has netted 91 defendants to date, 86 of whom have pleaded guilty or been convicted following a trial.
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