Title Reports Complement REM's Menu.

Most title searches are done in connection with the origination of a mortgage loan, but one firm has found a niche providing title reports to lenders managing distressed mortgage loans.

REM Corp., based in the Chicago area, provides appraisals, market valuations and portfolio valuations along with REO marketing and sales. The company added title searches to its menu of products because many of its mortgage servicing clients want that information as well in evaluating options to pursue a foreclosure alternative.

REM, which has been around for nine years, started out as purely a valuation company. Company president Jim Klima of REM said the firm has created a focus working with loans that are delinquent or in foreclosure. While loans in foreclosure may only account for a small percentage of a lender's servicing portfolio, they often find the burden of managing calls and billing related to valuation services to be a distraction from their core servicing work. Hence, they hire an outsourcer like REM to manage the process.

But the home's market value is not a lender's only concern. When evaluating a possible loan workout or short sale option, lenders need to find out if the property "has any skeletons in the closet," as Mr. Klima puts it.

"They really need to get a snapshot of the property and where their risk position is," he said.

For that reason, a current title search is done to verify who is actually the current owner of record and find out if there are any encumbrances affecting title to the home. The goal is to avoid finding out about any "surprises" that might affect whether or not the borrower qualifies for a short sale or other workout strategy.

The search gives the lender the book and page where the deed is recorded, then it lists out liens on the property and mortgages.