Teresa Varnes, REO escrow department manager for Chicago Title's Everett, Wash. office, was working on a purchase transaction for another escrow officer who was out on vacation. The sale price was $325,000 with a new loan in the amount of $292,500. The buyer's loan package had arrived and Teresa was inputting the lender fees — which was not an easy task given the lender redrew the loan documents five times!

After the borrower signed the documents, Teresa started preparing the file to be disbursed. Teresa reviewed the Commission Disbursement Authorization from the selling broker. On the form, it directed the settlement agent to send a referral fee to Sunset Real Estate Attn: C. Smith. The buyer's name in the transaction was Cindy Smith. Teresa thought it could not be a coincidence the buyer's name and the referral fee payee's name matched.

Teresa reviewed the lender's instructions to verify no credit was supposed to be paid by the selling broker to the buyer at closing. She then looked at the loan application to see where the buyer was employed. The buyer's loan application indicated she was employed at JetCity. Whew! Smith was not employed at Sunset Real Estate after all. Smith is a common name, Teresa did not give it another thought. She continued working on the file without further questioning the payment of the referral fee.

Once the file was balanced and ready for disbursement, Teresa handed the file off to Shelley Wiese, an escrow assistant. Shelley reviewed the file and brought it back to Teresa when she discovered the same likeness between the buyer's name and the referral fee payee's name at Sunset Real Estate.

Shelley found email correspondence in the file from the buyer. Most of the emails were generated from the buyer's personal email account, but there was one email the buyer sent to Shelley months ago with a signature block that showed her as a real estate agent from Sunset Real Estate!

Together Shelley and Teresa emailed the lender the Commission Disbursement Authorization reflecting a disbursement to Sunset Real Estate, to the attention of C. Smith in the amount of $5,875 and asked if the payment was approved by the lender.

The lender did not approve the payment and insisted Teresa close the loan and pay 100% of the commission to the selling broker without payment of the referral fee, which she did. Shelley notified the broker the referral fee would not be paid at closing.

For Shelley's sleuthing abilities and ferreting out the buyer's part–time employment as a real estate agent; and more importantly for her diligence in notifying the lender of a payment of a referral fee from the broker, she has received a $1,000 reward.