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John P. Brandt, owner of River Valley Title Agency, said that is not true. He acted only as a signatory witness for the closing, not as a representative of his title insurance company. The buyer never requested a title examination and although Duke told the buyer that Brandt searched the title, he did not. The settlement statement shows the settlement agent as River Valley Title Agency, Inc. and Brandt signed as the settlement agent for River Valley. Brandt charged only $150 for document preparation. Although there was no title insurance involved - and no mortgage - one has to question the wisdom of conducting a $2.5 million cash closing without doing any investigation at all. The settlement statement includes tax prorations of more than $23,000. Could Brandt have obtained the tax information without realizing that property was not vested in the Rivendale Property Management Group, shown on the settlement statement as the seller? Certainly that should have at least raised an eyebrow. Actually, there are several things on the settlement statement that I cannot quite figure out. Lines 213 and 513, Adjustments For Items Unpaid By Seller, show a credit to the buyer from the seller in the amount of $271,500 but there is no description of what this is for. Is it merely a gift? Also, quite odd, there is an Additional Credit for RE Commissions of $60,000 to the buyer on line 216. The seller paid the $60,000 commission on line 703 - so why is the buyer getting this credit and where did it come from? After everything was said and done, the buyer brought in $10,609.90 and the seller (who, of course, didn't even own this property) pocketed $10,459. That is not a bad deal - I don't think I have ever seen anyone buy a $2.5 million dollar home for less than one-half of one percent down! And, the amount due on the land contract is $362,000 less than the purchase price. Seems like a little hocus pocus took place in the creation of this settlement statement. But, it was a witness-only, cash closing... Brandt had no idea what was going on here, right?What the heck was Brandt thinking? How could he have been oblivious to the scam? The actual owner wasn't present and was not a party to the land contract. His motivation doesn't seem to be greed - he only charged $150! There doesn't seem to be much that would have been lost walking away from this deal. Was this Realtor, perhaps, a large source of business for River Valley? Although there was no title insurance issued in connection with this closing, I hope First American, shown on the settlement statement as River Valley's underwriter, will conduct an investigation. Ironically, this home is only a few doors down from where Duke lives, in another multi-million dollar home owned by Webster. Let's not forget about poor Ms. Webster. Though she should have had the sense to avoid getting involved with Duke, desperate people do desperate things. She was losing her job and needed a way out of her debt. She believed that Duke could really flip these properties quickly, I'm sure. Still, she should have known that this was fraud! She certainly knew that her application contained false information and that she could never afford to make the mortgage payments. Choosing to close on the purchases was a huge mistake! in filing the suit against Duke she has probably provided all the evidence that will be needed to land herself in jail... but what else could she do at this point? Hopefully, she will have plenty of company in the big house.About the Author Robert A. Franco has been in the title industry for nearly 15 years in the state of Ohio. The owner of VersaTitle, a full service abstracting and title company, and the founder and president of Source of Title, a Web site devoted to providing media and marketing services to the title industry, Franco has dedicated much of his professional career to furthering the role and significance of title examiners in the title insurance industry. You can read more from Robert's blog or write him at rfranco@sourceoftitle.com .
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