First American Title Insurance v. XWarehouse Lending Corp.

Plaintiff First American Title Insurance Company (First American) sought a declaration that it had no duty under its title insurance policies to defend or indemnify defendant XWarehouse Lending Corporation formerly known as Access Lending Corporation (Access). The trial court issued the requested declaration after ruling that Access was not an insured entitled to coverage under the policies. We agree, and accordingly, affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

A. Background

This litigation is part of the aftermath of a fraudulent loan scheme by CHL Mortgage Group, Inc. (CHL), now in chapter 7 bankruptcy, and CHL’s president Laurence Seidenfeld, who pleaded guilty to certain fraud offenses and is currently in federal prison. Access is one of the victims of CHL’s fraud.

Access is a company that facilitates or “warehouses” real property loans for a short period between the time a mortgage broker originates a loan with a borrower and the time the mortgage broker sells the loan to an investor in the secondary mortgage market. CHL, a mortgage broker that issued residential mortgage loans to individual borrowers, was a client of Access between 2002 and 2004…