Monday, October 31, 2016

Now Disbarred & Being Sought By Cops, Closing Attorney (Accused Of Peddling Phony Title Insurance Policies) Filched $100K In Refinancing Proceeds Intended To Pay Off Homeowners' Existing Mortgage, Leaving SC Family Facing Foreclosure; State Bar's Client Protection Fund Coughs Up $40K Maximum Reimbursement To Partially Compensate Victimized Couple

In Johns Island, South Carolina, WCSC-TV Channel 5 reports:
  • A Charleston County family says they have been fighting foreclosure for years and worry time is ticking down to save their home.

    William and MaryJohn Palmer say their former attorney stole more than $100,000 from them when they refinanced their house in 2012. Now, years later, the situation is still haunting them.

    “We’ve put a lot of hard work into the house. We’ve got a beautiful yard. We’ve been here now thirteen years. We’re raising our son here. We love it. It’s our home,” said William Palmer.

    South Carolina Federal Credit Union loaned them about $100,000 in October 2012 as a payoff to their original mortgage with Bank of America. They simply hoped to save money with a better interest rate. The Palmers hired then-attorney Brian Nathan Davis in Charleston to help the handle the closing.

    According to Davis’ disbarment paperwork with the South Carolina Supreme Court, “The lender wired the funds into trust account on October 19, 2012.”

    However, the court documents continue, Davis, “failed to issue the payoff of the existing mortgage of $100,824,12. In response to inquiries about the payoff from and the new lender, repeatedly made false assurances that the check had been sent. The balance in the trust account dropped below the amount necessary to cover the remaining disbursement on approximately forty-nine occasions.”

    Following Davis’ interim suspension, there were insufficient funds in his trust account to cover the payoff.

    As a result of the “misappropriation of funds,” Bank of America with its servicing company filed a foreclosure action against the Palmers in August 2013.

    At first, William Palmer says he was confused and assumed the collection calls and foreclosure warnings had to be a mistake.

    But he said after Davis stopped communicating and SCFCU expressed concerns about receiving the foreclosure paperwork, “I think that’s when I got the ah-ha moment. It was like, we’ve been duped. We’ve been screwed, we’ve been ripped off. I’m not sure how he did it or what he did but something is not right and he’s the bad guy.”

    According to the disbarment paperwork, Davis was misappropriating funds, issuing fraudulent title commitments and title insurance policies, and neglecting litigation matters. The court documents list more than thirty clients affected in various ways, including the Palmers, who are referred to as Matter VII Client F.

    “I just couldn’t believe it. I couldn’t believe it was real,” said William Palmer. “We’re good citizens. Good people. We pay our bills.” His wife MaryJohn added, “It’s still really hard to wrap your head around.”

    William said with their new attorney, they’ve tried to mediate and negotiate with the banks to reach a settlement. The SC Bar Lawyer’s Fund for Client Protection paid the Palmers $40,000 to help out.(1)

    But Bank of America, he claimed, “Put on top of the original payoff- missed payments, late fees, and attorney costs.” So they haven’t reached an agreement, and their foreclosure is still pending at this time.

    MaryJohn said, “We’re not a McMansion here. We’re a 1,500 square foot 1970’s ranch-style house. It’s not going to kill you to give us a break.”

    Brian Davis lived or lives in West Ashely. Court paperwork and various attorneys indicate he’s been nearly impossible to track down.

    Local Attorney Donna Taylor successfully sued Davis on behalf of clients who had a situation very similar to the Palmers. A judge issued a $300,000 judgement against Davis in that case. Taylor said the judge was clearly disgusted with what happened.

    However, Davis didn’t respond to the court and Taylor said he was difficult to find. She’s not sure if her clients will ever get paid. They don’t think Davis actually has many assets at this point. His own home in West Ashley is facing foreclosure.

    Taylor’s clients were able to work it out with their bank and, with some monetary help from the SC Bar Lawyer’s Fund for Client Protection, did not lose their home.

    The Palmers are hoping for such a resolution.

    The couple eventually filed a police report to seek criminal charges against Davis. The Charleston Police Department said a warrant has been issued in the case, but the department spokesperson said they haven’t been able to serve it yet. A copy of the warrant is not available until it is served.

    Davis has not responded to multiple requests for comment.

    “How could this guy be out there walking around living while he’s done this to this many people?” William questioned.
For more, see Family facing foreclosure says lawyer stole mortgage payoff.

For a story update, see Former attorney charged with Breach of Trust:
  • Charleston Police arrested Brian Nathan Davis []. Davis is charged with Breach of Trust with intent to commit fraud.
For the disbarment ruling, see In the Matter of Davis, 411 S.C. 209, 768 S.E.2d 206 (2015), which describes 17 matters involving the misappropriation of trust funds, among other bad acts. Among the title companies who cancelled Davis' authority to issue title policies prior to this ripoff were Chicago Title Company and Commonwealth Land Title Company.
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(1) The Lawyers’ Fund For Client Protection of the State of South Carolina, established by the state's Supreme Court and administered by the South Carolina Bar, reimburses qualified clients for money or property mishandled by Bar members. The loss must be one that was caused by the dishonest conduct of the lawyer acting either as an attorney or as a fiduciary in the matter in which the loss arose. The loss to be paid to any one client shall not exceed $40,000; the aggregate total of claims paid per attorney shall not exceed $200,000, according to the Fund's rules.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

posted by Home Equity Theft Reporter at 4:00 AM