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Eric Curran, a title officer for Ticor's Los Angeles operation, opened the title only order for a $275,000 loan, secured by free and clear property. While preparing the title report he discovered a deed conveying the property from the family trust into the name of the Mother and one of her Sons, as joint tenants.

As he processed the file to close, Eric was provided with an Affidavit of Death of the Mother, extinguishing her ownership interest. According to the death certificate attached to the affidavit she had battled cancer and executed the deed just two months prior to her death. Eric requested a copy of the trust agreement to review.

In Eric's review he discovered there were two brothers, and according to the trust agreement both were to act as co–trustees of the trust. The trust agreement also stated upon the death of the Mother, who was the original trustee of the trust, the property was to be conveyed to one of the brother's children. The child named is the offspring of the brother who was not shown on the recently recorded deed with the Mother.

Eric inquired further with the brother who was attempting to leverage the property to obtain the $275,000 loan, and was told he had no contact with his brother or his brother's children and in fact did not know where they lived.

Eric explained to him Ticor would not recognize the uninsured deed out of the trust as being valid without confirmation from his brother. Eric's biggest concern was whether or not the Mother was competent to sign the deed out of the trust, since she signed it in October 2017, and died shortly thereafter in December 2017. The would–be borrower told Eric he would go elsewhere for title insurance, rather than try to find his brother.

Eric confirmed the brothers and their children all lived within blocks of each other in Compton, California. He also was able to confirm the same order for title insurance was opened at a Fidelity National Title office. Eric picked up the phone and called the title officer at Fidelity National Title with his concerns. Fidelity National Title also declined to insure the transaction.

In February of 2018, the missing brother filed a Notice of Pendency of Action against his brother on behalf of the family trust, preventing the brother from leveraging the property for a loan or selling it, while the family sorts out the real legal owner of the property in court.

Eric's attention to detail and adherence to underwriting procedures, not only prevented Ticor from sustaining a claim on a loan policy of title insurance, but he also was able to locate where the subsequent order for title insurance was placed and alert them to potential issues that could have caused a sister company a claim. For his heroic efforts, Eric received a $1,500 reward from the Company along with a letter of recognition.

 

 
 

MORAL OF THE STORY

If the transaction closed and the Company issued a policy of title insurance to the lender, the policy could later be challenged by the insured lender if the brother who was not on title and his children were successful in overturning the uninsured deed as being invalid. If the uninsured deed is proved invalid in a court of law, then the brother currently in title has no authority to use the subject property for a $275,000 loan.

 
 

 

 
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