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Fraud files, title companies strike back

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Stewart Title, a Houston based title insurer claims company has filed suit against more than twenty four people, including brokers who worked for the net branch QuoteMeARate.com, in Massachusetts state courts alleging they participated in a mortgage fraud scheme resulting in more than $3 million in losses for Stewart.
     Stewart claims that disbarred attorney Alan Mason, who served as a title agent for the company from 1998 to December 2005, masterminded a scheme that fell apart in September 2005 when Stewart began receiving claims from lenders and property owners. Stewart said it received 32 claims under policies issued by Mason for properties in Massachusetts.
     The lawsuit alleges Mason and others recruited people to obtain mortgages and property deals with no money down, and as the title lawyer, Mason did not pay off refinanced mortgages. Instead he continued to pay on old mortgages and the remaining funds were spent on cars, boats, antiques and other real estate. Stewart also alleged that part of the conspiracy included kickbacks which were paid to several mortgage brokers who worked for QMAR. The brokers received fees in at least 19 of the 32 transactions.
     Mason and the other brokers are currently under investigation by several federal and state agencies including the FBI and a federal grand jury.
     This is not the first time a national net branch company has closed its doors because of fraud. Advantage, the 19th largest loan broker in the country closed its doors in 2004 after it was embroiled in a scandal during 2002 when the owner of one of its branches was accused of using a Virginia title insurance agency to illegally divert funds for his own benefits. Their involvement in this case left them scrambling to recover from the bad publicity which they were never able to shake.