03.20.08
Posted in Education, Industry News, Licensing, Money and Finance, Mortgage and title Fraud at 2:11 pm by Jeanne
Last month the Minnesota Department of Commerce announced it had taken action against another kickback scheme in which a title insurance agent set up sham affiliated businesses with real estate agents, mortgage originators and developers in order to get around state and federal laws prohibiting direct payments for referrals. The Department shut down six more sham affiliated business by revoking their title insurance licenses. Licenses revoked included: 1st Title, St Louis Park, MN; Timberland Title, Arden Hills, MN; Royal Title, Minneapolis, MN; St. Cloud Title & Abstract, St Cloud, MN and Foundation Title, Brooklyn Center, MN. The final company, Desert Sun Title, did not even have an address or any referral partners. It also fined Premier Title Insurance Agency $175,000 for the kickback scheme.
According to the MN Dept of Commerce enforcement web site, Premier Title Insurance “created and controlled sham Affiliated Business Arrangements (ABAs), employed or contracted with parties not licensed to sell insurance, ABAs sold Fidelity National Title’s policies, unlicensed people were paid commissions, and failed as a supervising agent to ensure that ABA relationships were disclosed..” They also “paid kickbacks or other things of value to its referral partners for the referral of title insurance business and real estate closings.”
Last year, the MN Department of Commerce fined First American Title Insurance Company of Santa Ana, California, $500,000 and shut down 35 of their sham affiliated businesses.
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01.04.08
Posted in Money and Finance, Mortgage and title Fraud, Real Estate fun, Value of a title searcher at 2:42 pm by Jeanne
Ten years ago, who would have believed the sleepy little Title Insurance business could be the subject of an amazing true crime book. Yes, we’re all reminded daily of the problems in our industry: greed, fraud, forgery, gluttony, sub-prime lending, phoney appraisals and more, but now here’s a real life tell-all.
A Family Cursed: The Kissel Dynasty, a Gilded Fortune and Two Brutal Murders uncovers classic Title Mafioso. The author, Kevin McMurray covers the life of two wheeling-dealing brothers. Andrew Kissel was convicted of forging mortgage deed releases and other fake documents to subvert millions in order to live an excessive lifestyle.
But Fidelity National Title recognized Kissel’s mortgage scam. By searching title to property, Fidelity found several active mortgages on property being used as collateral to secure a $6 million mortgage loan. Kissel gave Fidelity falsified mortgage releases to show the loans were paid off. Creating the bogus documents was as easy as the click of a mouse, McMurray accurately writes. Had it not been for a thorough Title Underwriter (You’ll have to read the book to find out how they figured it out) Kissel would probably still be perpetrating his real estate fraud. He was charged with federal bank fraud obtaining tens of millions in fraudulent loans from banks and other institutions.
I am an avid reader of mysteries, etc. but this one really hits home not because it’s just plausible, but because it happened and continues to happen every day.
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09.01.07
Posted in Education, Money and Finance at 3:17 pm by Jeanne
This is the best site I have ever seen to help detect what we all wonder about … is that email I just got from my bank, credit card co.,… etc. for real. Check it out at Phishing
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08.14.07
Posted in Money and Finance at 9:52 pm by Jeanne
A good article in American Chronicle reminded me of the closings that changed over from MIP to Piggy-back loans, where a first and second mortgage kept the borrower from having to pay the traditional Mtg. Ins. premium.
The article said “Most loans with higher than 80% loan to value ratios when they were originated had to have mortgage insurance on them if they were bought by institutional federally chartered savings and loans or FDIC insured banks.”
It seemed like a good idea from the borrowers perspective - save a few bucks. But from the Lender’s perspective, they lost their default insurance and will pay a corresponding price in this foreclosure market.
The article also pointed out “For every million dollars in loans being serviced on defaulted loans, many banks are losing about $10,000 a month plus the loss of value as the property market spirals inward on its dwindling integrity and corrupt viruses which have infected the entire industry. That is a serious implosion.”
Another perspective on what the lending industry has done to itself.
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Posted in E-recording, Education, Money and Finance at 9:16 pm by Jeanne
Catching up on email today, I saw another fine example of fraud. This one I have seen many times, but it keeps rearing its ugly head. An average couple taking out a home-equity line of credit… er, that would be five home-equity lines of credit, all in the same day, sinking five different lenders into the mucky-mud of bad loans never being repaid because of a home with negative equity. More fodder for my classes.
How incrediby important is each person in the chain - The Closer in rushing the documents to the County Recorder - the Recorder in getting the documents of record, the Abstractor in checking the public record to new recordings.
As an educator for County Recorders, Abstractors, Closers and Title Personnel, I am always harping on how important it is to record in a timely manner. After all laws in most states explain that the first person to get to their document recorded at the Courthouse has legal rights over others. I stress with Recorders how important it is to be timely in recording. I stress with Closers in those states that do not close in escrow how important it is to record ASAP. And I stress with Abstractors how important it is to be thorough in checking the record.
I was recently told by a customer that their policy was NOT to bother to re-check the record if the existing work was 3 mos old or less. Alot can happen in 3 mos. Alot can happen in three hours - as the article exemplifies. I am saddened by those who do not think it necessary to re-check the public records at the time of closing to see if anything has been filed in the interim that would afftect title. In my opinion, they are being negligently irresponsible. In my opinion, check the Gap, or Pay the Consequences.
But, in a case like this one, even the most prudent Abstractors, Recorders and Closers would likely not help the loss.
Taking 5 loans in one day is a classic example of the danger in table-funding closings. In “table-funding,” the closer disburses funds immediately upon signing documents, and the danger of interim recordings, known as “the gap period,” is assumed. Under this scenario, the title insurer or closer is at tremendous risk. Will Underwriters in table-fund states re-think the way of doing business by requiring a closing in escrow or perhaps pushing e-recording – or will the traditional marketplace way of doing business continue to dictate…. time will tell.
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06.27.07
Posted in Education, Money and Finance at 9:08 pm by Jeanne
The phone rings. As you hear the caller, a feeling of dread grows in the pit of your stomach. A young “representative” says he needs to speak with you about your child. The adrenalin builds.
The voice says your family member has been seriously injured and brought to the hospital. In order to begin treatment, paperwork needs to be completed immediately, and personal information like social security numbers and date of birth need to be verified. Money and/or insurance information also needs to be obtained so that they can proceed quickly.
Wait a second! What’s wrong with this picture? First of all, WHO are you talking to? What information are they asking for? This kind of scam is a form of phishing. The thief makes up a story to scare you into giving up one of your most valuable assets - your personal information. Think first. Hang up if anyone on the phone starts asking for that information. He or she is a criminal trying to steal your identity.
The bottom line is that lwe all need to learn NOT to give out any personal information over the phone when contacted by unknown and unverified individuals. Be alert, be aware and be safe.
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