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KIEHL-O-GRAM #61
Title Agents - The Final Episode
By Pat Kiehl – Investors Mortgage

During the past two months I have talked about title companies and asked to hear about some of your horror stories. Here is a summary of a few:

Title horror #1 – Another hard money lender said his client had a contract for a cash purchase (typical when using hard money.) The title agent disregarded the mortgage and note from the lender and closed with his cash. Result – the buyer has a free and clear property.

Title horror #2 – A borrower was refinancing her house and the title company in Clearwater was supposed to take some of the proceeds to pay off her credit cards. That never happened. She kept receiving credit card bills for three months until it was finally resolved.

Title horror #3 – An investor purchased her brother’s condo with the intent of selling it back when his finances were in better order. The new mortgage was going to pay off existing ones. The closing attorney paid off an equity line where the brother’s girlfriend was a co-borrower (absent from the closing) but never followed up on having her sign to close it out. The new owner later discovered that the former girlfriend borrowed another $15,000 from that line (as it was paid down and still available.) The closing attorney said it wasn’t his fault that the girlfriend committed fraud and she would have to deal with it.

Result – Another attorney filed a title claim, she is getting her money, and the old attorney may have a complaint filed with the bar. (By the way, filing complaints with the bar rarely does anything. You’re asking lawyers to review cases against their brethren.)

Title horror #4 – Since this took more space than expected I’ll add one that happened to me just last week. I pulled out of a closing because I couldn’t get an answer regarding a closing statement. I was financing a repeat client for the purchase of a house in Lehigh Acres (near Ft. Myers.) I had a question about the closing statement (which had nothing on the seller’s side.) I was informed that this wasn’t their normal procedure (allowing the lender to see the entire closing statement?)

When I did receive it, something looked “fishy.” Upon questioning it, I receive a call from the attorney for the title company (who just happened to be the seller.) He then informed me that I had no right to question anything on his statement and or to see his side of it. I explained to him that I have had attorneys commit fraud on me before and didn’t want to take any more chances. He explained to me that fraud doesn’t occur on the Gulf coast (Who “woulda” thought?) and I can put my money where sitting would be difficult. So I have an attorney, doing his own closing, who seems to be hiding something. Been there, done that and resulted in losing money. What would you have done?

As you can see, choosing a good title agent can be a hit and miss. Just like any other business, get referrals and then ask questions. When I chose a title company that could handle land trust closings, I interviewed the attorney for 1 ½ hours until I was satisfied. I also have a list of several agencies I stay away from. Hopefully, I won’t hear about your horror story and all your closings will be smooth. (RIGHT! As Bill Cosby says.)

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