MN Closer Jailed for Racketeering
A Forest Lake couple, Cynthia and Steven Strand, are in jail, facing 35 charges that allege $1.2 million was diverted from real estate sales through the couple’s closing company. Strand Closing was licensed as an independent closing service that closed loans for various title insurance agents underwritten by Old Republic, First American and Ticor. See more at MPLS Star Tribune or Kare 11 news
Bad Title Agent Leaves Innocent Consumers in Foreclosure
Consumers have been forced to teach their children not to answer the door because on the other side may stand a bill collector and other innocent victims find their home is now in foreclosure. Their problem: refinancing their home mortgages with Fort Wayne Title. The Indiana Secretary of State’s Office called it “one of the worst mortgage fraud cases our office has ever seen.” The owner, Joseph Garretson was sentenced to 11½ years in prison Friday for the mortgage scheme he orchestrated that removed more than $3.4 million from homeowners, placing them in financial turmoil. See more at News-Sentinel
Abstractors – Are you Searching ALL the Indices?
A recent Minnesota Case is a great example of the liability that abstractors carry. An owner of Property purchased two new parcels, putting a mortgage on both parcels, along with a parcel previously owned.
The Scott County Recorders office, when indexing the documents, properly filed it Grantor-Grantee, but missed indexing the legal description on the third parcel in the mortgage that was previously owned.
A court battle ensued as to whether or not there was constructive notice, because the mortgage was not shown on the Tract Index. To make a long story short, the court ruled that the mortgage could be found using the Grantor-Grantee, and that the mortgage was in fact a lien on the land.
I presume that this happened due to the fact that most computerized systems allow copying of names and legal descriptions between documents, and that the County Employee missed the fact that there were 3 parcels being mortgages, while only 2 were being purchased at that time.
While not a standard practice to search the grantor-grantee index for mortgages (especially with all the common names in Minnesota) it does make you think. It also reminds me how we rely on such things as affidavits to ask for additional information on sales. I have to say, I don’t like it, but I think the court was correct in its assessment. Until just five years ago, or so, the Grantor-ee Indices were the only legal indices in the state, but with the change in law requiring a tract index in addition to the Reception book, I think we began to rely on the tract more than ever. I think if I were doing a large commercial transaction in particular, I would double check the Grantor-grantee. After all, it doesn’t take long if you have it on computer, and you could have tremendous liability.
Closer Prelicense Course Scheduled for June 8th
An 8 hour MN Closer Prelicense class is scheduled for Tuesday, June 8th in St Paul, MN. The Seminar is a major step in obtaining a MN Closer License. See here for more details.
(Dept of Commerce Approval Pending)
Title Insurer Held Liable for Title Agent’s Actions
Insurance Journal (05/03/10)
Thurston County (Wash.) Superior Court Judge Paula Casey has ruled that the state insurance commissioner may hold an insurance company liable for the actions of the company’s appointed agent. “If you allow someone to do business on your behalf, it only stands to reason that you can be held responsible for what they do,” said Washington state Insurance Commissioner Mike Kreidler. In an April 23 order, Superior Court Judge Paula Casey ruled that Chicago Title Insurance Co. could be held responsible for illegal inducements offered to solicit title insurance business by one of its appointed agents, Land Title Co. of Kitsap County Inc. Read full article at Insurance Journal
MN Dept Commerce Takes Action against Embezzeling Closer
| Used with Permission of Robert Franco, Source of Title |
The Minnesota Department of Commerce has summarily suspended the real estate closing license, resident insurance producer license and Notary Public commission of Kuntee Singramdoo and charged her with embezzling over $230,000 in real estate closing proceeds and using the money to pay off her own creditors or her family members’ creditors.
Singramdoo, a resident of Lakeville, was an independent closer hired by Walsh Title & Real Estate Services, where she provided real estate closing services, sold title insurance policies and notarized real estate documents. The Commerce Department complaint alleges that Singramdoo engaged in a pattern of misappropriating, converting and/or embezzling settlement proceeds by issuing Walsh Title checks for her own benefit or for the benefit of her family members.
The alleged embezzlement includes at least 184 checks issued between February 2004 and June 2007 to 24 different creditors including $68,109 to U.S. Bank, $48,863 to Wells Fargo, $800 to JC Penney, $4,764 to Macy’s, $6,286 to Goodman Jewelers, $800 to Bloomingdale’s, $6,866 to Honda, $2,734 to American Express and $2,323 to Discover.
Singramdoo admitted under questioning from Commerce Department investigators that she embezzled the funds but at this time has only paid back $10,000 to Walsh Title.
Singramdoo accomplished the embezzlement by entering her own creditors on the HUD-1 mortgage loan form as if the debts belonged to the buyer or seller and subsequently issued checks directly to the creditors in her name. She also changed HUD-1 mortgage loan documents after closings to reflect the fraudulent payments.
“This brazen embezzlement scheme is a warning to everyone to pay close attention to the loan documents you are signing during the closing of a mortgage,” said Glenn Wilson, the commissioner of Minnesota’s Department of Commerce.
Real Estate Titles US – Inexpensive Title Education
A new online education company, RealEstateTitles.us (RETUS) has been formed specifically for title professionals. Its purpose is to provide high quality, inexpensive education for those involved with real estate titles. That includes: Closers, Abstractors and Title Searchers, County Recorders, Real Property Attorneys, Title Examiners, Title Agencies and Title Insurance Underwriters. The company offers primarily Professional Development courses for its customers, as most states have no education requirements for these professionals, but also offers some continuing education classes for those states that require CE. Additional License and Pre-license courses are planned for the future.
“RETUS Online courses provide quality education at lower costs for the consumer, as they don’t have to spend money for hotels, meals or travel, and they have the flexibility of working on their own timeframe. Even 15-20 minutes can be very worthwhile in studying important title concepts- and they can enter and exit courses as time allows.”
The online courses have all been prepared by subject matter experts in the land title field, some being written or edited by Jeanine W. (Jeanne) Johnson. Courses coming soon include
- ”A Settlement Agents Guide to Closing,“ which will cover the full spectum of closing, including the newest changes to the HUD-1 Settlement Statement;
- “Introduction to Title Insurance and Land Titles,” that gives a history of title insurance and is a primer of key concepts in the title industry;
- ”Real Property Ownership and Land Title Use,” which covers legal descriptions, platting, land use controls, rights of the government in planning. Especially helpful in dealing with new construction, land development and commercial properties.
Take a free test drive of the new title education courses for your state by clicking on your state, then the information button on the US MAP.
Can Massive Legislation be Far Behind?
From the Providence Journal
The former owner of a title insurance firm in East Providence pleaded guilty yesterday to a federal fraud charge for looting more than $1.3 million from company accounts and using the money for vacations, hair care, cosmetics and clothing. The FBI launched an investigation into the missing money in April 2007 amid allegations that owners may have emptied more than $800,000 from client accounts at Title America Closing Services LLC, an agent for Stewart title.
“We see a steady stream of these types of cases,” Connell, the spokesman for U.S. Attorney Corrente, said.
Can massive legislation be far behind, because the title insurance industry seems to be unable to police itself and the FBI, Secret Service, State Regulators and others are all getting involved to prosecute and clean up the messes.
Why Become a NALTEA Certified Abstractor?
The Louisiana Land Title Association presents:
“Why Become a NALTEA National Certified Abstractor?”
Jeanine W. Johnson from the National Association of Land Title Examiners and Abstractors (NALTEA) will be giving a presentation at the Louisiana Land Title Association (LLTA) Conference in New Orleans on December 5th, telling the LLTA about NALTEA and its National Certified Abstractor (NCA) designation and education program.The presentation is designed to encourage LLTA members to join NALTEA and show their level of expertise at the national level. The NCA certification will help them be recognized by national companies as an expert in the field of abstracting and will them to better understand the needs and language of out-of-state customers. In addition, NALTEA helps its members stay current on national real estate trends and changes, and gives an important national voice to independent Abstractors and Examiners.
The 2 hour program is a portion of the educational seminar given at the NALTEA conference in New Orleans earlier this year. The seminar will highlight the study guide “Principles of Abstracting and Land Records Management” National Edition, the same manual that was approved by NALTEA and provided to those who were preparing to take the NALTEA certified abstractor exam at the conference.
While every state handles land titles a bit differently, the seminar will focus on variations of a theme including things like “What is the difference between a mortgage and a deed of trust?” and “What are the most common forms of ownership used in the U.S.? ”
Jeanne Johnson is an active associate member of NALTEA. After having spent thirty years in the title industry she has been an author and subject matter expert for various publishers relating to title insurance, abstracting, title examination, and closing and she is now a full time educator for the land title industry and owner of
www.RealEstateTitles.us (RETUS) a content-specific website with reasonable, online education for the abstracting, title insurance, closing and land title industries.
Secret Service Investigates Misappropriation of Closing Funds
“The mission and of the United States Secret Service is to safeguard the nation’s financial infrastructure and payment systems to preserve the integrity of the economy, … “ And that statement is being put to use in another instance where a Title Company appears to have absconded with funds from the public. This time, Pennsylvania’s Priority Search, Inc. is being investigated by the Secret Service for allegedly not appropriately disbursing settlement funds. After Priority Search, Inc was recommended by a local real estate agent, the transactions moved forward, and at first seemed normal, but according to Pennsylvania’s Times Leader newspaper: (see full article)
Michael Bogdon borrowed more than $170,000 to buy a house in Rice Township, and the cash was given to Priority Search around the time of the Aug. 22 property closing.
Bogdon gutted and remodeled the home since then and was in a state of disbelief when the seller showed up at his doorstep about two weeks ago to inform him that Priority Search had never turned over the money.
Some of the funds were supposed to pay off the sellers’ old mortgage, and now the sellers – who are retirees – have outstanding mortgages on both their former and new houses, Bogdon said.
After the secret service investigation announcement was made public, the number of others stepped forward with similar missing funds problems having to do with Priority Search, Inc. This was clearly not an isolated incident. But misuse of closing funds happens not only in Pennsylvania, misuse of closing funds seems to have become a weekly occurrence across the country. Many title insurance and land title professionals are now concerned with this state of affairs. Specifically, a number of professionals are currently working on, or have recently completed, state legislation to licensed settlement agents. All seem to agree it would be a good idea to know who is handling the settlement funds, and what their background is. It is unfortunate that the industry hasn’t such problems, that kudos to those were working toward a solution. I believe licensing is in the best interest of the public, and of the title industry.
Home Closing 101: An Educational Initiative of the American Land Title Association
