169,014 New Listings - March 2010 - Last update March 12, 2010 6:15 AM ESTEven After Refinancing the Borrowers are Facing Foreclosure
Even after refinancing many borrowers are facing foreclosures because the cheques are failing to reach the proper accounts. Investigations are being carried on by the office of the Attorney General of Illinois. The Illinois Department of Financial and Professional Regulation is assisting them in the matter.
Many are not aware of the importance of title insurance in the mortgage process. In Illinois when the purchase of a residential house is made, the seller pays for a policy of the owner that gives protection to the buyer’s interest in the said property till the point of sale. The purchaser pays for a policy that protects the lender. When a house owner refinances the mortgage the latter is expected to purchase a new lender’s policy. Few do so although experts say that this would give protection to the house owner if refinancing problems arise. Frank Pelligrini of Prairie Title of Oak Park said, “People say, ‘I’ve owned this house for years, and I’ve not had any claims, so why should I spend the money?”
One who got caught in the trouble was Jeff Franson who refinanced his loan from Chase to SecurityNational Mortgage Company. The transaction was completed at the office of Counselors’ Title Co. But the refinancing cheque never reached Chase causing the latter to initiate foreclosure proceedings – much to the surprise of Franson. Meanwhile Counselors’ have closed shop. The centre of the trouble is that Ticor Title Insurance Company – a national title insurance underwriter claims that it had terminated its agreement with Counselor before Franson processed his refinancing. Franson, a construction worker in his mid forties had no idea that of these closing problems – it was not possible for him to know either.
Soon after Chase informed Franson of the bounced cheque Ticor brought a legal suit in the federal court at Cincinnati against Counselors claiming that the principals Erwins and Sichak had gone back on their contract and duty as fiduciary. Another allegation was negligence. The suit claims that contract with Counselors had been terminated on 13th March but even after that it continued to “issue purported Ticor title insurance ‘commitments’ (and) is representing to its customers that Ticor remains its title insurance underwriter.” In the suit Ticor said that it was in the know about 8 borrowers that have been affected in Indiana, Illinois and Ohio – the loans amouting to $1.6 million.
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