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PLAINTIFF’S EXHIBIT 20
Case 1:15-cv-00293-LTS-RWL Document 429-20 Filed 09/30/19 Page 2 of 6
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Lenders Coverage
Claim Withdrawn
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August 5, 2008
Connie L. Beaver
CHASE HOME FINANCE
1 East Ohio Street, 81h Floor, IN 1-9616
Indianapolis, Indiana 46204
Re: Claimant/Lender:
Borrower:
Property Address:
Los Angeles, California 90042
Loan Number:
Policy No.: IIJ!IIIIIIIII
Dear Ms. Beaver:
On June 27, 2008, JP Morgan Chase Bank ("JP Morgan") submitted a c1aim under the
Home Equity Loan Insurance Policy issued by XL Specialty Insurance Company ("XL") and
·idcnt!fred as Policy !'fo. HLP10 001 " ·cy"),·sccking recovery of-loss allegedly sustained in
connection with Loan Number JP Morgan' s insurance broker, Willis, advised us to
contact you if we had any questions a out t e documentation of this claim. XL has reviewed JP
Morgan's claim based upon the materials initially provided, but it needs additional information
and documentation to determine whether the claim is covered under the Policy.
First, pursuant to Section I. I of the Policy, XL agreed to "pay the Insured any Loss in
the event the Insured declares a Loan to be in Default and the ability of the Insured to recover
such Loss is impaired by material facts or circumstances not disclosed to the Insured or the
Insured's Agent on or prior to the Loan closing . . . . " The Policy does not, pursuant to
Exclusion 4, does not cover "any Loss caused by any material facts or circumstances of which
the Insured or the Insurcd's Agent had actual knowledge prior to the date of the Loan closing,
1185414.1
Page~ of3-'
or which were created, assumed or agreed to by the Insured or the lnsured's Agent after the
Loan closing."
In its submission, JP Morgan indicates that it approved the claimed transaction with the
understanding that it would be in a 1st lien position, but because of allegedly undisclosed loans, it
rd
is in 3 position. Based upon the materials provided to date, it does appear that JP Morgan is in
rd
the 3 lien position, but we do not have enough information to determine whether JP Morgan
was aware of any of the intervening liens when it approved, closed and funded the claimed
transaction.
The underwriting notes suggest that JP Morgan investigated the title to the property prior
to approving the claimed loan. In order to evaluate this issue, we would appreciate it if you
would let us know whether JP Morgan obtained a limited or full title search prior to approving
and funding the claimed loan. If it did, please provide us with a copy of the title report and any
title policies issued in connection therewith. If JP Morgan did not obtain a title search, please let
us know whether JP Morgan's policies and procedures normally require such a search prior to
approving, closing and funding this type of transaction.
Second, the Policy does not, pursuant to Exclusion 2, cover a loss if "the Insured or the
lnsured's Agent did not comply with the lnsured's procedures and requirements (in effect at
the time of the Loan approval) regarding (a) taking of written or electronic application, (b)
acquiring and reviewing a credit bureau report not more than sixty (60) days prior to the Loan
closing, (c) obtaining an affidavit from the Borrower on a form approved by the Insurer, (d)
establishing ownership of the Secured Property through a limited title search or other means,
(e) submitting a Loan for the filing of a lien on the Secured Property with the appropriate
municipality or with the UCC, within sixty (60) days of the Loan closing, and (t) complying
with the loan-to-loan value ratio and credit score guidelines, if such noncompliance was a
material reason for the Loss, but only as respects Insuring Agreement I."
Based upon the infonnation provided to date, XL cannot determine whether JP Morgan
complies with its procedures and requirements when it approved and funded the claimed
transaction. Please provide us with a copy of the procedures and requirements (including any
underwriting guidelines applicable to the claimed transaction) in effect when JP Morgan
approved the claimed transaction, 1 a copy of the underwriting notes regarding this transaction
and any other documents reflecting JP Morgan's relating to the analysis and approval of the
claimed transaction.
Once we receive this information, we will evaluate the claim and advise you whether it is
covered under the Policy. In the interim, please be advised that the foregoing enumeration of
defenses under the Policy is not meant to be nor is to be construed by you as a waiver of any
term, provision, condition, definition or exclusion that may now or hereafter apply to coverage
afforded under the Policy. XL expressly reserves all rights and all defenses available under the
1
We have asked JP Morgan to produce a copy of its policies and procedures in connection with
other claims. To the extent that JP Morgan has or intends to produce the relevant policies in connection
with another claim, we do not need duplicate copies of these documents. Please let us know which
policies apply to this claim.
1185414 I
Policy and at law to deny coverage on the foregoing bases and to deny coverage or rescind the
Policy on additional and alternative bases as other terms, conditions, statements, representations
or warranties in connection with the Policy are found to apply.
Thank you. If you have any questions, please feel free to contact me.
Sincerely yours,
XL Insurance America
1185414.1
Borrower Name :
Property Address: Los Angeles, CA 90042
Incorrect lien position Copy of original Credit Report Date loan was recorded (must be
obtained prior to Closing sent for recording within 60 days
of closing)
Suspected Non-Disclosure and/or Copy of Title Report showing Broker's price opinion (Appraisal
Fraud Chase lien not in expected product) at the time the loan was
position made
Material fact or circumstances not C8] Loan Settlement Statement Broker's price opinion (Appraisal
disclosed prior to closing that lead product) at the time of default
to the loss?
Additional Information: