Consumer complaint received 2017-01-05
Company: FIRST AMERICAN FINANCIAL CORPORATION
State: IL
Product: Mortgage
Sub-product: Conventional adjustable mortgage (ARM)
Issue: Settlement process and costs

Complaint:
I have submitted this complaint previously and do not have the proper response. To start with, I was audited from the IRS for XXXX, XXXX, XXXX and the resulted in them filing a lien on my home. Even though I provided documentation that the results were not accurate and that I did not have the means to pay the amount that they were requesting ... .due to the fact that when I refinanced my home, the mortgage was filed in the wrong county - appearing that they house was debt free. The mortgage company ( XXXX ) will only file a claim after the IRS takes the property - then they will file a claim. However, is n't Title insurance for the mortgage company actually protecting them from situations just like this? XXXX states that they are willing to work with me but that is untrue. As I had a buyer for the property they would not sign off as it would not allow them the funds to clear the mortgage and the only way that they will accept a partial payment for the mortgage is when the IRS forecloses. 
The Loan Policy guarantees the lender a valid and enforceable lien, and assures that no claimant other than those noted in the policy has a prior claim against the real estate. The policy assures that the purchaser-borrower has title to the property being pledged as security for the loan. And, the policy obligates the title insurer to pay for defending against any claim filed against the title that might supersede the lender 's lien. If unsuccessful, it must also satisfy that claim should it be upheld in court. 
The IRS states that it is the insurance company and mortgage company that need to adjust this situation as " In the event XXXX is unable to determine the amount of loss or damage, XXXX may, at its option, require as a condition of payment that the Insured Claimant furnish a signed proof of loss. The proof of loss must describe the defect, lien, encumbrance, or other matter insured against by this policy that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. '' The most common claims scenario where a proof of loss is requested from the insured claimant is where there is an easement that affects the insured land that was not excluded from coverage. Typically the type the proof of loss that is provided is an appraisal. 
Submitting a proof of loss does not automatically mean that the title company will then pay that amount for the claim. It is common for the title company to seek an opinion regarding the diminution of value from an independent third party, which is usually a different appraiser. 
In other situations, providing a proof of loss to the title company could be as simple as providing copies of receipts that reflect the loss the insured claimant suffered. That would be appropriate in the situation where the insured claimant had to pay past due real estate taxes. 
I do not understand that due to the Title company 's negligence and filing in the wrong county- I am being penalized and will lose my house in the process. I am a single parent working XXXX jobs to make ends meet and there is no help for me. In my documents that were provided to the IRS indicate " ability not to pay '' the title with IRS in first position indicates that the IRS will not negotiate and their stance is that the mortgage/insurance company needs to make the necessary adjustments. 
Please advise.

Company response to consumer: Closed with explanation