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Last Update: 02/24/16

Last week, the Sun Sentinel published an article that pointed out how one title insurance underwriter was advising its members, i.e., Florida title insurances agents, regarding “mortgage terminator” judgments and the problems associated with those lawsuits.  Seems the title insurance agents are being warned against issuing title insurance policies now because of longstanding legal precedent.  This is an issue we’ve been warning Floridians about for awhile now, given all the ForeclosureFraud antics we were worried that those antics would have an impact on clear title (and the lack thereof). It seems that our concerns are now coming to light.

For more details on Florida Land Title Problems, see our earlier posts:

Title Companies Getting Careful About Issuing Title Insurance.

What’s happening is a growing wariness in the title insurance industry about insuring title and issuing a title policy where a title search shows that a piece of property is the subject matter of a lawsuit where a judgment is sought to terminate a mortgage (a “mortgage termination lawsuit”).   Underwriters aren’t going to be issuing title insurance policies on those pieces of real estate without their legal counsel giving the internal okay.

Seems that the insurance companies are being instructed by their lawyers that these judgments may not be respected in the future because in Florida there is a Florida Supreme Court case that has been on the books since 1940 that holds the mortgage can still be used to foreclose on the property regardless of a “terminator” lawsuit.

To read about that case and how it has been cited in Florida precedent, Cone Bros Construction Co. v Moore, 141 Fla. 420, 193 So. 288 (1940) go here.

Larry’s Tip

The position of these title insurers is that a quiet title action that is brought by a landowner to try to address the Foreclosure Fraud mess are susceptible to not being honored.   In cases where there is more than one lien-holder on that property – say a condominium with a mortgage that also has an Association lien – the bank isn’t required under the law to come to the party where the homeowners’ association is filing the lawsuit.  The bank doesn’t have to be part of the lawsuit.

If the title insurance company issues a title policy on one of these properties (one where a “mortgage terminator” lawsuit is brought) and then the bank forecloses on the property, the title insurance company is vulnerable to a claim because the mortgage termination judgment will probable not be respected.  Obviously, that’s not good business for the title insurance company, so they are being very very careful about who and what gets coverage these days.

Which is understandable, because title is one Big Fat Mess these days.

What is a Quiet Title Action?

A quiet title action in Florida is a lawsuit that is filed pursuant to Chapter 65 of the Florida Statutes.  The landowner files the lawsuit to get a judgment from a Florida court that cleans up the title to the property.  It serves to “quiet title” and to “remove a cloud from the title.”  Florida Statute 65.011 provides the following:

(2) GROUNDS.—When a person or corporation not the rightful owner of land has any conveyance or other evidence of title thereto, or asserts any claim, or pretends to have any right or title thereto, which may cast a cloud on the title of the real owner, or when any person or corporation is the true and equitable owner of land the record title to which is not in the person or corporation because of the defective execution of any deed or mortgage because of the omission of a seal thereon, the lack of witnesses, or any defect or omission in the wording of the acknowledgment of a party or parties thereto, when the person or corporation claims title thereto by the defective instrument and the defective instrument was apparently made and delivered by the grantor to convey or mortgage the real estate and was recorded in the county where the land lies, or when possession of the land has been held by any person or corporation adverse to the record owner thereof or his or her heirs and assigns until such adverse possession has ripened into a good title under the statutes of this state, such person or corporation may file complaint in any county in which any part of the land is situated to have the conveyance or other evidence of claim or title canceled and the cloud removed from the title and to have his or her title quieted, whether such real owner is in possession or not or is threatened to be disturbed in his or her possession or not, and whether defendant is a resident of this state or not, and whether the title has been litigated at law or not, and whether the adverse claim or title or interest is void on its face or not, or if not void on its face that it may require extrinsic evidence to establish its validity. A guardian ad litem shall not be appointed unless it shall affirmatively appear that the interest of minors, persons of unsound mind, or convicts are involved.

(4) JUDGMENT.—If it appears that plaintiff has legal title to the land or is the equitable owner thereof based on one or more of the grounds mentioned in subsection (2), or if a default is entered against defendant (in which case no evidence need be taken), the court shall enter judgment removing the alleged cloud from the title to the land and forever quieting the title in plaintiff and those claiming under him or her since the commencement of the action and adjudging plaintiff to have a good fee simple title to said land or the interest thereby cleared of cloud.

What is happening in Florida and elsewhere in this country is that real estate titles are in chaos.  Here in Florida, where for generation after generation since the time of Spanish Land Grants people have been very careful to insure that land is transferred properly, the uncertainty caused by the mortgage securities markets, mortgage servicer issues and outright fraudulent actions have all acted to muddy the waters that have been so carefully respected and protected by longstanding laws and case precedent.

A wise and savvy Florida real estate owner is going to take steps to make sure that they have clear and unencumbered title to their property, and anyone seeking to buy property in the State of Florida will have an experienced Florida real estate attorney working with them on the deal.  As we continue to report, it’s the Wild Wild West out there right now, and it will be years before things get under control.

A good piece of advice when you and your family are purchasing or selling your family home in one of the biggest transactions of your life is to at least talk with a Florida real estate lawyer. Getting someone to review all of the paperwork including the all important promissory note, isn’t as costly as most of us think it is. And it’s always a lot cheaper than paying to fix a problem after a closing occurs.  Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.Related Posts:

Quiet Title Actions in Florida: What Damages Can You Get? In a Quiet Title Lawsuit, What Do You Get When You Win?

Florida Quiet Title Actions: 10 Things You Should Know About Quieting Title in the State of Florida

Florida “Wild Deeds” – Just One More Florida Land Title Issue For Quiet Title Actions: What is a “Wild Deed”?

Should Florida Property Owners Proceed Pro Se and Represent Themselves in Legal Claims or Quiet Title Actions? Probably Not. Here’s Why.


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Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.


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