The Worst that Could Happen with a Bad Title & Escrow Company

Tens of thousands of dollars may be invested and disappear in an instant. Title insurance fraud is not very common, but it does happen. That’s why having a trustworthy title and escrow company in Florida should be top priority for real estate agents and investors.

A recent case of title insurance fraud in Orlando has some Florida homebuyers in an outrage.

The case was recently brought against a title insurance agent and the daughter of two reputable real estate agents, who allegedly stole over a million dollars by taking her clients’ deposits that were stored in escrow funds. The total amount of stolen title and escrow company and client funds amounted to $1.3 million.

“Her family has been in real estate for a long time, and we trusted her mom. So we assumed she was legitimate,” stated a local Orlando businessman who lost his $50,000 deposit. In addition to this major loss, another group of buyers also lost money on a $120,000 investment that was supposed to be held to close a short sale.

The court records for the case include recorded statements that the trouble with stolen funds started when the title insurance agent missed two months of leave for a surgery in 2014. The title insurance agent responsible for the theft was arrested in March and now faces criminal charges as well as a civil lawsuit brought about by First American Title Insurance Company, which first appointed her to the position, as this company insures compliance and was responsible for covering more than a million dollars in losses as the result of the stolen funds.

What’s the worst that could happen with a bad escrow company?

Your money gets stolen. Just having your money taken in the first place can put you in a tight position. You might not get your huge deposit back for an extended period of time. Other complications could also arise from title insurance fraud that devalue the home, such as failing to record a title due to stolen funds.

Here’s a list of the worst that can happen with title and escrow fraud:

  • Misappropriation of closing funds for use other than as provided for in the closing instructions.
  • Failure to pay off existing mortgage loans in full, diverting closing funds for personal use while attempting to make periodic payments on the existing loans.
  • Misappropriation of title insurance premium with failure to report and issue title insurance policies.
  • Failure to perform all services specified in the closing instructions or U.S. Department of Housing and Urban Development (HUD) form.
  • Fraudulent activity by unlicensed or unauthorized entities.
  • Engaging in check-kiting or other banking-related fraudulent schemes with title agency accounts.
  • Acceptance of funds that are not “good funds” for the purpose of closing transactions.
  • Intentional or fraudulent misrepresentation of title defects or failure to disclose title  defects with the intention of burdening the title underwriter with subsequent losses.
  • Participation or complacency in mortgage or real estate fraud schemes such as flipping  and flopping (reverse staging), phony appraisals or rushed escrow closings.
  • Cyber-fraud aimed at identity theft or misdirection of escrow funds to the accounts of unrelated parties, typically via fraudulently obtained online banking credentials of the title company.

Do you need to find a trustworthy title and escrow company?

It’s important that you can trust your title insurance agent, as this may be one of the largest investments you make in your life, or if you’re an investor, on behalf of the consumer. Core Title Company is a title and escrow company dedicated to customer service and a better closing experience. Work with a trusted national title company to always assure compliance.

2017-11-20T21:01:28+00:00

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