More Mail

Thanks everyone for your recent comments.  It seems that Belen’s response to one of our recent posts is generating some good discussion.

Here is the original comment from Belen:

It’s not the first time a US company sent business elsewhere. They have been doing it for years; why is it a surprise now? The US has lots of red tape and the cost of doing business is high; not to mention workers compensation cases and other policies involved, including sexual harassment.  Employees do not want to work more than they have to and most people are not willing to go the extra mile for their employers, so what can they do? They go where people want to work and are willing to go the extra mile for half of the wages.

And the responses:

Sean: This is not the first time that a US company has sent their operation elsewhere but the problem is that they still keep their business in the US. Can you see the difference Belen? Real estate agents, brokers, sellers and buyers of homes in California think that when they buy services from First American Corporation, they are buying services from a corporation operating in America. I am really happy that someone is bringing awareness to the real estate community about which country is benefiting with the jobs when they order services from First American Corporation or I should say First Indian Corporation?

Jacob: Coincidentally when the unemployment in California is high, the real estate market goes down, or is no coincidence. First American/First Indian Corporation is contributing to the Indian economy through job creation while benefiting from our California real estate business. Legal maybe, fair Oh NO!

Why is Bank of America Suing First American for Half a Billion Dollars?

Did you know that Bank of America filed a complaint against First American Title Insurance Company for alleged failure to pay claims related to their quasi-title insurance products?

Hey that’s their language not mine! You can read it here: http://www.scribd.com/doc/28508474/Bank-of-America-v-First-American

BoA is saying that the title insurance provided by First American for title defects, undisclosed home liens, vesting claims and errors in the legal description of homes has caused harm to the tune of $500 million dollars!

Although Bank of America is probably First American’s largest client, as of February, First American denied more than 2,200 BoA claims, and hasn’t responded to more than 2,300 additional claims. Wow!

If these allegations are correct, isn’t it surprising that First American would treat one of their biggest customers in this manner?

Here’s a quick summary of the lawsuit issues (which can be found on page 11 of the lawsuit in the above link):

  • Wrong Lien Position: For example, a loan where BoA intended to have the 2nd lien on a property but in fact has the 4th lien because two intervening liens were not disclosed by the borrower during the application process and were not listed as secured liens in the borrower’s credit report.
  • Missing Signatures: The mortgage wasn’t signed by all owners of the property, or those required to sign the mortgage — like an owner’s spouse.
  • Wrong Legal Description: The legal description in the mortgage doesn’t match the last deed of record which conveys the property to the owner(s).

How could First American have let so many mistakes happen?

I don’t know about you, but I’d sure like to know how much of this work might have been sent off shore to India.

In my opinion working with local service providers always come out on top.

Here’s another take away for me: Only do business with folks you trust who know the market.

What’s your opinion?  We’d like to know.