What Happens If Refiance Money is Stolen?
This is a great post by Dawn...and it really makes you wonder...what happens if refinance money is stolen? What if Cybercrimanls hijack funds that are being wired...amazing stuff...thanks for doing the work.
~ What Happens If Refinance Money is Stolen? ~
What happens if refinance money is stolen? Can the homeowners be liable? When a homeowner decides to refinance their home, a title company will be involved in the transaction through the refinance company to coordinate the paperwork, pay off all parties involved, record and release Deeds of Trust, etc.
I am referring to a recent story in the business section of the Denver Post. A couple was refinancing their home through Bank A and paying off their current mortgage with Bank B. The couple signed all their paperwork at the title company for the new loan. The funds from Bank A for the new loan were in the title company's escrow account prior to the paperwork being signed. Once the paperwork was signed, the title company wired the funds from their escrow account to Bank B to pay off the old mortgage held against the property.
Here is the problem that occurred. Cybercriminals out of eastern Europe hijacked the funds being wired. Bank B never received their money, so the old mortgage was never repaid. The couple now owed both Bank A and Bank B for a mortgage on their property. State law does not require the title company to carry insurance for this type of theft, according to the Colorado Division of Insurance. And the title company did not have any insurance to cover the theft of the funds.
The money was stolen from the title company's escrow account at Chase Bank, along with almost one million dollars. This money accounted for eight other real estate transactions. The couple was facing foreclosure due to the Bank B not receiving any payments for their loan on the property. The homeowners were responsible for BOTH mortgages. The nightmare for the couple lasted two years, practically ruined their credit and faced losing their dream home, even though they never missed a mortgage payment. The couple did pay for a title policy, it did protect the bank that loaned the money,but not the couple.
The title company was a small company located in Aurora, Colorado. They wrote the policy, but the underwriter for the policy is an insurance company that specializes in title policies. According to the president of Land Title Association of Colorado, a trade group, this is not something that is likely to happen. But it did happen and the couple is still looking for some answers.
The bottom line is we should always know who we are dealing with. Make sure they are a reputable company and/or person. A homeowner can be liable if the refinance money is stolen.
Keller Williams Real Estate, LLC
Broker Associate, CNE, CRS, GRI, SFR
Servicing buyers and sellers in the Denver metro area since 1993
Three easy ways to contact me:
email me directly Dawn@downhomeindenver.com
visit my website to search for homes or find the value of what your home is currently worth visit: www.DownHomeInDenver.com
call or text me directly on my cell: 303-332-8025
The choice is yours. Let my expertise work for you! Servicing the Denver Metro area/ Aurora, Centennial, Denver, Englewood, Greenwood Village, Littleton, Lonetree and Parker
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