Insurer Blasts Mortgage Cos.' 'Straw Buyer' Schemes

Law360, New York (May 28, 2010, 3:49 PM EDT) -- Stewart Title Guaranty Co. has sued Federal Guaranty Mortgage Co. and a slew of other financial services firms, saying it shouldn't have to cover title insurance policies on multiple mortgages for half a dozen properties in Broward County, Fla., because they were illegally funneled through "straw buyers."

Stewart Title filed the complaint seeking declaratory judgment Thursday in the U.S. District Court for the Southern District of Florida, alleging that Federal Guaranty had faked mortgage transactions on half a dozen properties in Broward County just to pass...
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