national marine bankers association november 12 – 14, 2006 key largo, florida victor i. koock
TRANSCRIPT
National Marine Bankers AssociationNovember 12 – 14, 2006
Key Largo, Florida
Victor I. Koock
Here’s The Problem
BORROWER/OWNER
CATERPILLARFiled July 17
INSURANCEPlaced July 8
Here’s Another Problem
ANOTHER MORTGAGE(FILED BUT DID NOT APPEAR IN THE ABSTRACT)
GECC(RECORDED WITH COAST GUARD)
ENERGY VII
Try This Problem
PRUDENTIAL INSURANCE COMPANY
92 , 000 ,000.00$ .
Fleet Mortgage
TYPOGRAPHICAL ERROR!!!
One Last Problem
CHAPEL SANTIAGO
JONES
SPARKMAN
MARYLAND NATIONAL BANKFROMKEY BANK
Sent a bunch of lawyers’ kids to college
All involved title issues that were difficult to uncover even with the best due diligence
Title insurance affords protection for those types of losses
COMMON THREADS
Title insurance protects the lender for lack of priority of the Preferred Mortgage over any lien for Necessaries
Title insurance covers Cost of Defense
Caterpillar Case
Title Insurance Covers:
Fraud
Invalidity or Unenforceability of Preferred Mortgage
Priority of another lien over the Preferred Mortgage
Cost of Defense
Energy VII / GECC Case
Failure of the insured Preferred Mortgage to be a Preferred Mortgage as defined in the U.S. Code
Cost of Defense
Prudential and the Missing Decimal
Title Insurance Covers:Title to vessel being vested other than as
insuredDefects in the TitleFraudFailure of the insured mortgage to be a
Preferred MortgageCost of Defense
MADAM CHAPEL
1) Title to the vessel is as it has been represented to be;
2) The Vessel is free of liens and encumbrances;
3) The Transaction is free of fraud, errors or mistakes;
4) Monies are distributed properly;
5) Preferred Mortgage has the Priority that was expected.
Five Significant Points Covered byTitle Insurance
COST OF DEFENSE
Disclosure Form for Lenders
Delayed Document Filings (more than 30 days after execution date)– 88.1% of vessel abstracts had delayed document filings– 80.2% of vessel abstracts had delayed document filings
that were either a Bill of Sale or a Preferred Mortgage Claims
– 19.8% of vessel abstracts had one or more claims filed– 7.9% of vessel abstracts had one or more unsatisfied
claims (no marshal’s sale)
Highlights from Study of more than 100 Vessel Abstracts
Out of Registry or Deleted from Documentation at one time: – Foreign or State Registry
2.8% foreign registered at one time 9.9% state registered at one time
– Other Deletions from Documentation - 15.8% Date Errors - 11.8% of vessel abstracts contained one or more
date errors Transfers of Interest and Preferred Mortgages
– Vessels were sold an average of 3.96 times– Vessels were mortgaged an average of 3.16 times
Highlights from Study of more than 100 Vessel Abstracts