Posted Sep 10, 2007 08:25 pm CDT
In the latest sign of a struggling real estate market that is creating work for lawyers in related practice areas, title insurers say claims are up sharply—particularly concerning policies that were issued recently.
First American Corp., one of the biggest title insurers in the country, paid out 52 percent more title claims in the second quarter of this year than it did during the same period last year, reports the Wall Street Journal (sub. req.). “It appears that many of these claims involve fraud, forgery and other factors often seen where loans are made to borrowers in financial distress,” says Parker Kennedy, the company’s CEO.
Even when claims are legitimate, fewer are made when the value of housing is rising, says Jim Maher, of the American Land Title Association trade group. “Everybody looks for the deep pocket to get them out of a bad deal.”