Sunday, July 11, 2010

Another Lawyer/Closing Agent In Hot Water Over Missing Escrow Cash To Pay Off Mortgages; Refinancing Borrowers Getting F'closure Threats Tip Off Bank

In Hamilton County, Ohio, the Cincinnati Enquirer reports:
  • An Edgewood lawyer who acts as the title agent for Fifth Third Bank mortgages is accused of keeping more than $1.1 million and the bank wants it back. The Cincinnati-based bank is suing Donald Richardson and his Commitment Title Agency in Hamilton County Common Pleas Court, accusing them of fraud, unjust enrichment and other allegations involving the missing money.

  • Fifth Third has used Richardson and his title company to refinance many home mortgages. But in one week in May, the bank's suit notes, Richardson didn't turn over $1,124,034.63 from five refinanced mortgages financed by the bank.

  • The bank found out about the incidents when their customers called to complain about their old mortgages not being paid and receiving foreclosure threats. Because the bank didn't want those five refinanced homes to go into foreclosure, it forked over an additional $1.1 million to pay off the old mortgages. Neither Richardson nor his attorney returned calls Friday.

  • The bank asked Common Pleas Court Judge Dennis Helmick to prevent Richardson from selling his Villa Hills house, the building housing his business office or his cars - and to prevent him from spending any of the money they say belongs to the bank. Richardson and his title company "pose a significant risk of liquidating their assets and property and fleeing," the suit notes. It adds the bank suspects there are other similar transactions involving Richardson where money is missing and continues to investigate.

  • To complete a home refinancing, the bank placed in escrow the money to pay off the old mortgage. Richardson and his title company didn't forward that money to pay off the mortgages but kept it, spending it on the "purchase of real and personal property, to pay personal debts and to otherwise convert the funds to their own use," the bank suit alleges. It adds that Richardson transferred over $1 million from that escrow account to bank accounts owned by him and his title company. [...] It's unclear if Richardson has been criminally charged.

For the story, see Bank: Title agent kept mortgage funds.

(1) Inasmuch as Richardson is an attorney, this could spell bad news for the The Clients' Security Fund of Ohio, which was established to provide assistance to clients who have been ripped off by the dishonest conduct of a licensed Ohio attorney. According to a June 10, 2010 news release, the Board of Commissioners of the Clients’ Security Fund of Ohio (CSF) awarded $411,230 to 52 victims of attorney theft at its latest meeting. Eighteen former or suspended Ohio attorneys were found to have misappropriated client funds. Five deceased Ohio attorneys were also involved in the claims presented to the board. See Victims of Attorney Theft Awarded More Than $400,000 by Clients' Security Fund. See also, Victims of Attorney Theft Received Nearly $700,000 in Fiscal Year 2009.

For information on "attorney ripoff reimbursement funds" in other states and Canada, see:

posted by Home Equity Theft Reporter at 4:04 AM