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Gabriela "Gabby" Soto, Assistant Vice President, Assistant Branch Manager and Escrow Officer for Fidelity National Title Agency, was hard at work clearing title for a refinance. The Commitment for Title Insurance revealed the borrower had two liens. One where the previous lender was also the current lender and a second where a private party was the lender. This was no surprise.
The loan officer with the lending bank coordinated with Gabby to obtain payoff demands. After receiving the payoff demands, the lender determined the new loan would be for $960,000 and would consolidate the two loan balances to one. Closing was tentatively scheduled for January 30, 2020.
Gabby placed an order with her title department to have the Commitment updated to reflect the new loan amount, in order for the loan officer to include it with his final package to the lender's underwriting department.
The updated Commitment revealed that on January 9, 2020, a Release and Reconveyance of Deed of Trust of the first lien was recorded. Title added a new requirement to obtain a letter from the bank stating the loan was paid in full. Gabby requested it from the loan officer, since the payoff lender and the new lender were the same banking institution.
The loan officer responded right away stating the loan was not paid. It would be paid in full once the refinance closed at the end of the month. The loan officer also noted the person who signed the Release and Reconveyance did not work for his bank. The officer did not recognize the notary's name either.
Gabby notified Diane Davis, Residential Title Officer, who replied, "And THAT is why we double check recent releases." The loan officer continued to work towards closing and called the borrower, who also knew nothing about the release.
Jennifer L. Douthit, Vice President, Escrow Administrator, sent in this nomination. She was so proud of Gabby for calling for the updated Commitment and requesting a zero payoff demand from the payoff lender. She said, "I just wanted to share a success story where one of our amazing Escrow Officers followed her gut and Company policy, and found a fraudulently recorded release prior to closing. I love when we do things right."
National Escrow Administration found Gabby's actions to be outstanding and for this she is being rewarded $1,500. Keep up the good work!
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MORAL OF THE STORY
As a reminder, here are some of the values of title insurance:
- Title problems are discovered in more than one–third of residential real estate transactions. These "defects" must be resolved prior to closing. The most common problems are existing liens, unpaid mortgages, and recording errors of names, addresses or legal descriptions.
- FNF relies on a thorough search of existing records to identify possible defects in order to resolve them prior to issuing a policy. Intensive and expensive work is performed up–front to minimize claims. The better we do this, the lower our number of claims.
- Researching titles is extremely labor–intensive, since only about 15 percent of public records are computerized. The industry invests a substantial amount of time and expense to collect and evaluate title records.
Keeping these values in mind, Diana Hoffman, Corporate Escrow Administrator, confirmed the release was flagged in the title plant. She kept reviewing the release and reconveyance, which appeared to have been prepared by another title insurance company.
Diana wondered if the release and reconveyance had a typo or whether it was forged all together. She decided to contact the other title company to confirm. She emailed the release and reconveyance to their division manager who replied within 30 minutes.
The division manager replied saying, "Thank you for bringing this to my attention. It is fraud. It is not our form and they have our name at the top incorrect, but it is the correct address of our title department. And they used our escrow number from the file where the borrower put a second on the property with a private lender. In the notary block it has the correct name of our title manager, but he certainly didn't sign it. Thank you again for sending it."
Although title insurance companies are competitors, they do invest collectively in title plants and all rely on the accuracy of those plants. Anything that can be done to protect the integrity of the public record system is beneficial to everyone. In this example, passing on the suspicious document proved to be beneficial to all.
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Article provided by contributing author:
Diana Hoffman, Corporate Escrow Administrator
Fidelity National Title Group
National Escrow Administration
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