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Lisa Williams, closing coordinator for ServiceLink in Moon Township, Pennsylvania, was processing a cash-out loan. The property being used as collateral for the loan is in North Carolina and held in a life estate for two minor children. A deed taking the property out of the life estate had been recorded.
Lisa noted per ServiceLink's underwriting counsel, the deed that recorded in July 2022 (taking the property out of the life estate) was not valid without a special proceeding under North Carolina law NCGS 35A — with a superior court judge allowing and confirming the sale.
The underwriting counsel stated the borrower would need to hire a North Carolina attorney to petition the court. Lisa informed the borrower of the underwriting requirement via email.
Miraculously, the next day, the borrower responded with a document entitled, "Special Proceeding with Superior Court." His email read, 'Good morning, please see attached document. Wow. We were able to get a signature quickly. They must be tired of us harassing them. :-) "
Lisa noticed the Special Proceeding with Superior Court document was missing the court case information and the formal submission pages that should have been included. She sent the document to the ServiceLink title curative team for review. They denied it for insuring purposes for the same reasons.
Lisa took it upon herself to contact the court directly to obtain a full copy of the proceedings. The court coordinator who answered the phone requested a copy of the document Lisa had received from the borrower. The court coordinator said she would research the proceedings and call back.
Lisa received a call back from the court coordinator letting her know the document was fraudulent and the court did not have a proceeding on August 15, 2022, the date indicated on the Special Proceeding with Superior Court.
The court coordinator then sent a copy of an email message to Lisa that read, in part:
Good Afternoon Sheriff,
We have an issue.
Beginning of this month, I received a telephone call from a xxxx xxxx. He was asking me to have a judge send an email to his title company stating that the elimination of a life estate and the deed filed in July was good. He is trying to refinance. I told him that a judge would not send an arbitrary email clearing title. He said that his brother is an attorney and is helping him. He was advised that he needed to open a case in the County, file a petition and have a hearing. I asked Mr. xxxx for the telephone number of his title company so I could explain all to them. I have spoken with Lisa Williams, Closing Coordinator with Servicelink in Moon Township, PA. She told Mr. xxxx the same thing.
Mr. xxxx also went to the County Clerk's office. They advised that they need a petition so a special proceeding could be opened.
Today, I receive a call from Lisa Williams advising that she has an order signed by the Judge but was missing information.
I have confirmed the following:
- No special proceeding action has been open
- No hearing took place on Monday, August 15th before the Clerk or Judge
- Judge has been out of the County all week
- Judge did not sign the Special Proceeding with Superior Court document. I have an email confirming that.
The Judge instructed me to contact you.
I alerted the title company that they should not rely on the attached document.
In a search of the County deeds, I found possible contact information for Mr. xxxx for your reference.
Please let me know if you need any additional information from me.
Lisa's contact with the court led to the verification that the document was indeed fraudulent. She saved the Company from closing and insuring a $100,000 cash-out loan with a deed in the chain of title that had not been properly approved by the courts.
The deed represented a cloud on the title to the subject property. The borrower cannot use the property as collateral with the life estate still intact.
For her detection and prevention of a possible claim Lisa has received a letter of recognition from the Company, as well as a $1,500 reward.
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