NOW Fidelity National Is Heading in the Right Direction

/in /by

According to MarketTicker via 4closureFraud, Fidelity National has done the thing (at least in Florida) that makes it demand that mortgage servicers warrant against mistakes-otherwise-known-as-fraud meaningful.

Eh, I have an update from Fidelity Title – this is for Florida foreclosures.

Here’s the salient “trouble spot” – this is what must be in the foreclosure docket for them to grant a policy:

The plaintiff in the action is: (1) the record holder of the mortgage being foreclosed; or (2) has filed the original promissory note in the foreclosure file; or (3) has obtained a final order reinstating the lost promissory note.

In other words, before Fidelity will insure the title of a foreclosure sale, it wants to see real proof that the party foreclosing on the home has the legal right to do so. Imagine that?!?! Property rights!

This may well increase the likelihood of clearing out the shitpile the finance industry created.

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  1. bobschacht says:

    Thanks for keeping on top of this, EW.
    I haven’t been able to keep up with you lately– or rather, I haven’t been able to keep up with the comments. But keep it up!

    How’s the weather where you are? Has the storm passed through yet?

    Bob in AZ

    • emptywheel says:

      Nope, still windy as hell. McCaffrey the MilleniaLab loves the wind (but then, he’s not tall enough to get the worst of it), so we traipsed outside in the wind for an hour today w/me holding onto him like an anchor.

  2. pdaly says:

    Encouraging trend, but doesn’t Number 3 still seem like a black box with potential for abuse?

    or (3) has obtained a final order reinstating the lost promissory note.

    Is a “final order” provided by a court? What sort of due diligence is required to recreate a lost promissory note?

    • bmaz says:

      It is actually a legitimate process that has always been around. If done right, there has to be a ton of due diligent searching and swearing under oath as to the nature of it and circumstances by individuals actually knowledgeable and participating in it at every step and all other documentation on the deed, and mortgage transaction demonstrated to be in accord.

      • pdaly says:

        Thanks. It’s the “done right” part that I am doubtful about, especially if in a rocket docket.

        Upon further reflection, number 2 seems like a gamble on the part of the note holder. Placing the “original” in a folder requires lots of trust in the courthouse not to lose it.

        Wouldn’t the servicer, if it had 100s or 1000s of folders, want to keep the originals in hand, especially since the lack of a note in other foreclosure cases has prevented (some) servicers from showing standing. Why risk losing 100s or 1000s of notes in one fell swoop?

        • bmaz says:

          Yes; by my understanding, they do not lodge the original with the court, but must be able to produce it if demanded.

          And, for clarification, the process I described in @4 above is only for when there is to be a Lost Note Affidavit process. There is, and should be a presumption of regularity on this stuff, but there has to be honest compliance and ability to produce the blue ink signed note upon demand.

  3. parsnip says:

    Quoting Tanta:

    If it becomes a requirement that [foreclosure] can proceed only with the original note in the courtroom, and the presence of an LNA [Lost Note Affidavit] always means dismissal, then the things are going to have to be handled and shipped and received with the same level of security as a million-dollar bearer bond. Like, a Brink’s truck and a bonded courier carrying a briefcase handcuffed to his wrist. You want to pay the cost of that? No. You don’t. But you will.

    Aren’t the notes ‘indorsed in blank’ because the banks didn’t know who was supposed to end up with them until the game of musical foreclosure stopped? How are courts supposed to interpret blank assignees, or post-assigned notes?

  4. b2020 says:

    “This may well increase the likelihood of clearing out the shitpile the finance industry created.”

    Be careful what you wish for. The banks are still broken, the Fed is still sitting on the shitpile it exchanged for money, the Treasury is still offering unlimited taxpayer backstop to Fannie and Freddie, the designated dumping grounds for the shitpile. Fed and Treasure are acting without mandate, Congressional approval, or legal cover, and have absolutely nothing left at this point to push on the string. Obama and his Merry Men have succeeded in priming the tycoons of executive compensation for a repeat performance of the Great Recession, and anything that speeds up the write-off (aka conversion of private debt gone bust to hypothetical future tax revenue) to less than a Tokyo Decade could bring down the entire House of Sharks.

    Or are those sharktopus? Vampire sharktopus? Never mind.