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Copy of affidavit
Exhibit A: Itemized list of loans issued to Evans brothers filed by MVT
Exhibit D: copy of title certificate issued to MVT
Exhibit E: Copy of title certificate issued to MVT
Mississippi Valley Title Insurance Company filed the affidavit of Brad Jones in the bankruptcy case of Chris Evans on November 17. The affidavit provides the testimony of Brad Jones, an employee of MVT who provides specific details on how Charles Evans, Jr. and Chris Evans allegedly perpetuated a fraud upon Mississippi Valley Title and many banks. Mississippi Valley also reveals that claims in excess of $41 million have been filed against it by affected lenders.
Mr. Jones is a lawyer, CPA, and certified fraud examiner. Mr. Jones states Charles Evans, Jr. was "an approved attorney for Mississippi Valley Title, although not retained, hired, or employed by Mississippi Valley Title." MVT and its lawyers have consistently pointed out this fact at every step of this case. Evans was authorized to "provide title certificates to MVT".
A title certificate is important when obtaining a loan on a property. The certificate allows the borrower to show the bank he is indeed the true owner of the property and also tells the bank there are no other liens on the property. If liens are missed, either the title insurance company has to pay them (the lienholders had a valid claim on the property when it was sold, and thus the proceeds of the sale) or the bank finds out it doesn't have the first lien on the property (thus it may be unable to recover the loan if the borrower defaults). This is important as banks will not provide a loan on property unless there are no other liens, or the other lienholders have agreed in writing to subordinate their claim to that of the bank.
The most crucial part of the affidavit states Chris Evans, Charles Evans, Jr., "and others entered in concert in a fraudulent and/or criminal scheme to defraud MVT and Lenders by borrowing funds from Lenders using certain land as collateral when title to the collateral was not of record in the landowner."
"As a part of the fraudulent scheme.. (the Evans brothers) would misrepresent to the Lenders and MVT that the land was owned by an entity controlled by Jon Christopher Evans and/or Charles H. Evans, Jr."
Crucial because without the issuing of phony title certificates, such a scheme would not work as banks would not lend money and MVT would not issue insurance policies. Jones testifies "based upon the false title certificates... and title insurance commitments issued by Mississippi Valley Title, Lenders would advance funds to Jon Christopher Evans, Charles H. Evans, Jr., and/or others."
The other crucial point about this case is that "contrary to representations made by Charles H. Evans, Jr., in title certificates, record title to the subject property was never transferred into the entity that actually borrowed the funds and whose title was insured."
In plain English, Mr. Jones is stating that one Evans company would buy a tract of land, another Evans company would borrow money on it, but the company that bought the land never transferred the land to the company that borrowed the money. However, the title certificate issued to the bank and MVT said it did own the land even though in reality the other company did.
A simple analogy would be suppose I took your car and got a loan on it from a pawn shop. The pawn shop asks me for a copy of the title so I give them one I forged. Unfortunately for them, the title is still in your name but they don't know that little fact. I get money on the car, don't pay back the loan, then the pawn shop finds out its not my car and can't repossess it.
Mississippi Valley stated in Exhibit A (listed above, compare it to this earlier post) that as of November 17, 2009, lenders have filed 65 title insurance claims with Mississippi Valley on loans granted because Charles Evans, Jr. issued (allegedly) phony title certificates. Mississippi Valley states the total amount of the claims is $41,415,242 (JJ estimated the banks exposure in Mississippi at $47 million. Not bad.) Paying these claims will wipe out much of Mississippi Valley's claims reserves. However, Old Republic, its parent company, has reserves of several hundred million dollars and is able to cover any claims Mississippi Valley must pay. Old Republic Q3 earnings statement
The affidavit also lists several large tracts purchased by an Evans company in Madison County: 38 acres on Highland Colony Parkway and 84 acres on Park Place Boulevard. It is also important to note that not all loans were gained through fraudulent title certificates and that the banks losses are probably larger than the amount stated by Mississippi Valley, as the assets of Charles H. Evans, Jr. are frozen and Chris Evans is in bankruptcy, thus the remaining loans will probably enter into default. It is also worth remembering Texas banks issued approximately $27 million in loans as well and that nearly half of these loans are now in foreclosure. The Evans case is like the Energizer Bunny.... it just keeps going...and going.... and going.
Thursday, November 19, 2009
Mississippi Valley Title: 65 claims for $41,415,242 have been filed by lenders in Evans case
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15 comments:
Nothing short of outstanding work Kingfish. You put the other print media in this town to shame.
And you don't gin up traffic for your website by featuring race baiting stories. Kudos to you.
The extent of my race-baiting will be posting a picture of Karin Taylor.
Great job KF! As usual.
You know, I remember reading the comments left by the guy who kept baiting you to look into this. Who would have thought! You both have really uncovered a hugh story here. Well done.
OK - looks like we have to figure out how to block spam without losing the capability to post anonymously.
Got it. I've thought about requiring the word verification thing for a few days so as to stop the spam.
Block the spam but let some of those erectile dysfunction ads come through. Many of the secret male readers here from the JFP and Y'allPolitics have serious probs with their woody's and need the information in those posts. Consider it a public service.
when you make $$$ hand over fist, they better have some reserves since claims are seldom to never filed.
where I live there are more title companies than Gas stations...a very profitable business...
Is Old Republic required to honor claims against MVT, or are you just saying that Old Republic has the wherewithal to honor those claims if it so chooses?
Prediction: Less than $4.5 million will be paid out in claims associated with the indicated $42 million "insured" amount. Ultimately, MVT will settle for an undisclosed amount, or a published amount sufficient to maintain credibility - that is how the insurance game is played. As many of us know - insurance is an "extortion" racket sanctioned by our legal system. Banks require that borrowers with collateralized loans maintain it, but insurance companies rarely pay the amounts implied by the respective policies for most claims, and usually force the policyholder to settle for much less, if they pay anything, on the rest. In this case, where the banks are the policyholders, they will lose even if they "win"; because, they will either have to accept a settlement for much less now, or, in the alternitive, get to pay legal fees for 6-7 years until an ultimate decision is rendered. In the meantime, the banks will be required to take a hit to capital for the potential losses. Bottom line, the banks will lose big, notwithstanding the reserves of MVT, Old Republic or Mother Goose... something the State Banking Commissioner won't tell the public...
So, is that about a quarter million per acre on the Highland Colony property?
November 19, 2009 4:34 PM:
You don't realize how close to the truth you really are! They will probably pay their lawyers more than the policyholders. I didn't realize there were similar frauds in Hinds and Rankin counties too.
November 19, 2009 4:08 PM:
The policies were issued "jointly" by MVT and ORNT, meaning they are BOTH liable and should have to pay.
Although I have not seen one of the policies at issue, one of my MVT/ORNT policies begins with: "SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE...AND THE CONDITIONS AND STIPULATIONS..."
Interpretation: "Subject to whatever the heck MVT/ORNT may ultimately determine to be in their best interest to pay, if anything..."
Evans's E&O carrier ought to interplead its liability limit to the court and let the feeding frenzy begin.
Levy is a good guy. Just doing his job.
November 20, 2009 9:17 AM:
Or it could be that the last clause in paragraph 5 on page 2 of the "Closing Protection Letter" is something that MVT could use to wiggle out of paying the majority of these claims:
"5. Claims shall be made promptly to the Company at its principal office at 124 One Madison Plaza, Suite 2100, Madison, Mississippi
39110. When the failure to give prompt notice shall prejudice the Company, then liability of the Company hereunder shall be
reduced to the extent of such prejudice. However in no instance shall the Company be liable he"'under unless notice of claim in
writing is received by the Company at its principal office within ninety (90) days from the date of discovery of loss. Furthermore,
and notwithstanding any other limitations set forth in this paragraph, in no instance shall the Company be liable hereunder unless notice of claim in writing is received by the Company at its principal office one (1) year from the date of closing."
This "Closing Protection Letter" is given to lenders by MVT in order "to reimburse you for actual loss" caused by:
"2. Fraud or dishonesty of the Issuing Agent or Approved Attorney in handling your funds or documents in connection with such
closings."
Why would MVT not be already paying these claims since they themselves have alleged in the pleadings a (covered) loss due to a (covered) fraud? Are they not talking out of both sides of their mouth? Does it depend on which lenders received a Closing Protection Letter?
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