Mortgage & Title Insurance Fraud Help

Ohio Senate Bill 185 which became effective 1/1/07, giving Buyers and Sellers the opportunity to purchase Closing Protection Coverage when title insurance is involved. Additionally the law also requires Title Agents to offer those Buyers and Sellers where title insurance is not involved an opportunity to purchase title insurance and obtain Closing Protection Coverage (CPC). Had this been in effect back in 2002 when Barbara Grey and Sandy Hamlin dealt with Equity land title they would have had an opportunity to protect themselves against the loss of their funds.

I'm on your side with some help in this matter. Read Senate Bill 185 below. I warn you...its long but it could help you in the future.



Sec. 3953.23. (A) Every title insurance agent shall keep
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books of account and record and vouchers pertaining to the
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business of title insurance in such manner that the title
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insurance company may readily ascertain from time to time whether
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the agent has complied with this chapter.
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(B) A title insurance agent may engage in the business of
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handling escrows of real property transactions directly connected
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with the business of title insurance, provided that the agent
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shall maintain a separate record of all receipts and disbursements
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of escrow funds and shall not commingle any such funds with the
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agent's own funds or with funds held by the agent in any other
3041
capacity; and if at any time the superintendent of insurance
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determines that an agent has failed to comply with any of the
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provisions of this section, the superintendent may revoke the
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license of the agent pursuant to section 3905.14 of the Revised
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Code, subject to review as provided for in Chapter 119. of the
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Revised Code. All agents shall be covered by a fidelity bond in an
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amount and with a company satisfactory to the principal.
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(C) All title insurance agents or agencies that handle
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escrows in real property transactions not involving the issuance
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of title insurance shall have coverage that protects the parties
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to such transactions against theft, misappropriation, fraud, or
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any other failure to properly disburse settlement, closing, or
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escrow funds. The superintendent shall adopt rules under Chapter
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119. of the Revised Code setting forth the minimum requirements
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for such coverage, including, but not limited to, the minimum
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amounts, terms, and conditions of such coverage.
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(D) The superintendent shall require every title insurance
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agent or agency and any subcontractors to maintain an errors and
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omissions policy, in any amount exceeding minimum limits
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established by the superintendent, that includes but is not
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limited to coverage for the agent's or agency's delegation of any
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agent or agency function. The superintendent shall adopt rules
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under Chapter 119. of the Revised Code setting forth the minimum
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requirements for that coverage, including but not limited to the
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minimum amounts, terms, and conditions of the coverage.
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Sec. 3953.30. (A) As used in this section:
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(1) "Residential mortgage loan" means an obligation to pay a
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sum of money evidenced by a note and secured by a lien upon real
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property located within this state containing two or fewer
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residential units or on which two or fewer residential units are
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to be constructed and includes such an obligation on a residential
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condominium or cooperative unit.
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(2) "Residential mortgage lender" means any person,
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including, but not limited to, banks, savings and loan
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associations, mortgage brokers, credit unions, or savings banks,
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that lends money or extends or grants credit and obtains a
3077
residential mortgage to assure payment of the debt.
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(B) A title insurance agent issuing a lender's title
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insurance policy in conjunction with a residential mortgage loan
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made simultaneously with the purchase of all or part of the real
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property securing the loan, where no owner's title insurance
3082
policy has been requested, shall give written notice, on a form
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prescribed or approved by the superintendent of insurance, to the
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mortgagor at the time the commitment is prepared. The notice shall
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explain that a lender's title insurance policy is to be issued
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protecting the residential mortgage lender, and that the policy
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does not provide title insurance protection to the mortgagor as
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the owner of the property being purchased. The notice shall
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explain what an owner's title insurance policy insures against and
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what possible exposures exist for the mortgagor that could be
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insured against through the purchase of an owner's title insurance
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policy. The notice shall state that the mortgagor may obtain an
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owner's title insurance policy protecting the mortgagor as the
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owner of the property, either at a specified cost or at an
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approximate cost if the proposed coverages or amount of insurance
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is not then known. The title insurance agent shall maintain a copy
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of the notice, signed by the mortgagor, in the relevant
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underwriting file for at least ten years after the effective date
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of the lender's title insurance policy.
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Sec. 3953.32. (A) At the time of close with a title insurance
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company for issuance of a title insurance policy, the title
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insurance company or the title insurance agent shall offer closing
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or settlement protection to the lender, borrower, and seller of
3104
the property, and to any applicant for title insurance.
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(B) The closing or settlement protection offered pursuant to
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this section shall indemnify any lender, borrower, seller, and
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applicant that has requested the protection, both individually and
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collectively, against the loss of settlement funds resulting from
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any of the following acts of the title insurance company's named
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title insurance agent or anyone acting on the agent's behalf:
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(1) Theft, misappropriation, fraud, or any other failure to
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properly disburse settlement, closing, or escrow funds;
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(2) Failure to comply with any applicable written closing
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instructions, when agreed to by the title insurance agent.
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(C) The issuance of closing or settlement protection by a
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title insurance company pursuant to division (A) of this section
3117
is part of the business of title insurance for purposes of Chapter
3118
3953. of the Revised Code.
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(D) Except as provided in division (A) of this section, a
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title insurance company shall not offer or issue any coverage
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purporting to indemnify against a person's improper acts or
3122
omissions in connection with escrow, settlement, or closing
3123
services.
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(E) The superintendent of insurance may adopt rules in
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accordance with Chapter 119. of the Revised Code as the
3126
superintendent considers necessary to carry out the purposes of
3127
this section, including, but not limited to, rules that detail the
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specific language that must be included in the written document
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offering closing or settlement protection as provided for in
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division (A) of this section.
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Sec. 3953.33. (A) Every title insurance agent or agency that
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handles escrow, settlement, closing, or security deposit accounts
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shall have an annual independent review made of its escrow,
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settlement, closing, and security deposit accounts on a
3135
calendar-year basis within ninety days after the close of the
3136
previous fiscal year. The title insurance agent or agency shall
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provide proof of the annual review to each title insurance company
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that it represents. The superintendent of insurance shall
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promulgate rules under Chapter 119. of the Revised Code setting
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forth the minimum threshold level at which a review is required,
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the standards of the review, the minimum qualifications of the
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independent party conducting the review, and the form of the
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report that is required. The superintendent may also require title
3144
insurance agents or agencies to provide a copy of their annual
3145
review reports to the superintendent. The annual review required
3146
by this division does not apply to interest on lawyer's trust
3147
accounts established and maintained by an attorney pursuant to
3148
sections 4705.09 and 4705.10 of the Revised Code.
3149

(B) Title insurance agents and agencies shall allow the
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superintendent and each and every title insurer that they
3151
represent reasonable access to all of their escrow, settlement,
3152
closing, and security deposit accounts and any and all supporting
3153
account information in order to ascertain the safety and security
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of the funds held by the title insurance agent or agency.
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(C) Title insurance agents and agencies shall maintain
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sufficient records of their affairs, including their escrow
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operations and escrow trust accounts, so that the superintendent
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may adequately ensure that the title insurance agent or agency is
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in compliance of this chapter. Records kept pursuant to this
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section shall be kept for a period of not less than ten years
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following the transactions to which the records relate. The
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superintendent may prescribe the specific records and documents to
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be kept.
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Sec. 3953.35. (A) No title insurance agent shall do any of
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the following in connection with a mortgage loan of seventy-five
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thousand dollars or less:
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(1) Knowingly coerce or wrongfully instruct the consumer to
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enter into the loan;
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(2) Knowingly fail to disclose to the consumer that the
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consumer does not have to close on the loan;
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(3) Knowingly make a material misrepresentation to the
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consumer regarding the terms of the loan.
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(B) A violation of this section is deemed an unfair and
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deceptive act or practice in violation of section 1345.02 of the
3175
Revised Code.
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