Would you switch to a title agency for foreclosure work?
After three years of wrangling, determination, and convincing the government that a title agency was no longer operating, the US Department of Housing and Urban Development granted Frank Chapman control of all government-owned foreclosed homes in Ohio and Michigan.
This means that the Cleveland attorney will have the ability to sell the more than 18,000 homes that have filed for foreclosure. Ohio’s foreclosure activity increased in April, up 39 percent from the previous month and up 135 percent from April 2006, bringing the state’s foreclosure total to the third-largest in the nation, according to RealtyTrac results. The state reported 11,431 foreclosure applications for the month, a foreclosure rate of one foreclosure application for every 418 homes, 1.9 times the national average. Meanwhile, Michigan reported a total of 6,876 homes in foreclosure during April, a foreclosure rate of one application for every 614 homes.
Chapman, 39, and his law firm, the Chapman Law Firm, will bill the government an estimated $173.7 million over five years for their efforts to sell the homes.
Chapman jumped at the opportunity to handle foreclosure sales because he already owned Lakeside Title and Escrow in Cleveland, which was under contract to process HUD closings.
That’s what could create a potential conflict of interest, the government and Greenleaf Construction Co., a Kansas City competitor, suggested. Michaelson, Connor & Boul, a California-based firm that previously did the Ohio foreclosure work, has also joined the fray. The matter ended up repeatedly before the US Court of Federal Claims and the Government Accountability Office.
In April, Chapman convinced the government that he had given his title company to a former associate. He said in 2006 that he accepted the loss (about $7 million) in order to get the HUD contract.
Chapman said he has hired 54 people so far for his office in Brooklyn Heights, Ohio, a suburb of Cleveland. He hopes to hire another 20 to work in Cleveland neighborhoods and 75 to work elsewhere in Ohio and Michigan.
HUD spokesman Lemar Wooley said that of 21 similar contracts applied for in 2003, the majority were awarded in 2004 and that this was the only contract that took three years to be awarded due to repeated bid protests.
The homes will be available through the Chapman Law Firm Real Estate Services website, http://www.clfres.com/.
