Closing Agent Accused Of Forging Subordination Agreement In Home Refinance, Pocketing Premiums w/out Issuing About 100 Title Insurance Policies

The Minnesota Department of Commerce: has recently accused the three companies, including Morris Abstract & Title Inc. of New Prague, of allegedly forging signatures or endorsements to gain access to and misappropriate consumer funds. According to their press release:

• In the spring of 2009, the department received a complaint from a bank that was refinancing a mortgage on a property in Scott County. The bank reported to the department that Morris Abstract & Title, which performed the closing on the loan, had allegedly forged the property owners' signature on an agreement required by the bank.

• That agreement would have given the refinanced mortgage first priority over a previous mortgage the homeowner obtained on the property. In fact, the property owner did not authorize or otherwise consent to the agreement, the department alleges. In order to facilitate the transaction, Morris allegedly forged the property owners' signature. Morris Abstract & Title then sold a mortgagor's title policy on the property, the department alleges.

• Another complaint from an attorney who claimed Morris allegedly failed to record a mortgage as part of a 2003 transaction involving her client led the department to conduct an inspection at Morris' home. During that inspection, Morris allegedly admitted that he had approximately 100 loan files from transactions as old as 2004 in which a [title] policy still needed to be issued even though he received title premiums and other fees at closing.(1)

• Last [month], the department issued a statement of charges and notice of hearing against Andrew Morris and Morris Abstract & Title. The prehearing conference is scheduled for Monday, December 21.

For the press release, see Minnesota Collection Agencies, Title Insurer accessed personal information.

(1) The Minnesota Department of Commerce's Real Estate Education, Research and Recovery Fund could potentially find itself on the hook for some or all of the monetary losses suffered by any victims of the alleged improper conduct. According to their website:

• The purpose of the Real Estate Education, Research and Recovery Fund is to compensate any person who has lost money due to a licensed real estate broker, salesperson, or closing agent’s fraudulent, deceptive or dishonest practices, or conversion of trust funds. The improper action that was committed must be an activity that required a license. [...] Applicants may be awarded any amount from $0 to $150,000, [...].