It’s not uncommon for funds to be held aside in escrow during a home sale.
The money is kept on the side as an assurance that a seller will fulfill any outstanding obligations to a sales contract. But that’s not how it happened for Michael Moore, 64, of Avenel, who sold his home in Clark in November 2010.
“I gave power of attorney to the lawyer for the closing,” said Moore, 64. “He said they were withholding $7,500 and it would take about two weeks until the paperwork was completed.”
But more than a year later, the escrow funds had not been returned.
Here’s what happened.
Moore bought the home with his long-time girlfriend in 1998.
They decided to sell in November 2010, and the couple had separate attorneys for the transaction.
The new buyers’ lawyer said there was an outstanding mortgage on the property.
Moore said that couldn’t be.
But apparently, it wasn’t.
All mortgage lenders require title insurance, which protects the homeowner and the lender in case there are any unpaid property taxes or other liens on a property.
Records showed there was a $133,000 mortgage from First Residential Mortgage dating back to 1993, in the names of the owners who sold the home to Moore and his girlfriend.
But Moore’s settlement statement when he bought the home showed that mortgage had been paid off.
And even if the loan hadn’t been paid off, the title insurance policy – written by Old Republic Title of Minneapolis – would have covered Moore and his girlfriend. The couple’s attorneys tried to get the escrow funds released, but the new buyers’ attorney, Adolph Sicheri, wouldn’t budge.
“There is an open mortgage of record and it’s the seller’s responsibility to clear the home,” Sicheri said. “That’s all we’ve been asking.”
Sicheri recommended that Moore file suit to have the loan discharged, or contact the lender, First Residential Mortgage, for proof that the loan was paid.
Moore said he couldn’t afford to go to court, and the evidence of payment was already in the closing paperwork.
“I’m not releasing that money until they do the right thing,” Sicheri said. “It’s still a cloud on the title.”
Over time, Moore said, his attorney from the sale of the property didn’t seem to want to help.
After several months, Moore said, the attorney stopped returning his calls, and that the attorney said the cost to fight in court would be the same as what Moore would recoup from the escrow account.
Moore gave up on his attorney and asked Bamboozled, in June 2011, to get involved.
We first confirmed that the mortgage in question was never listed as paid with the county.
We next tried to reach Moore’s attorney from the sale, but he didn’t respond to our inquiries.
So we tried the mortgage lender, First Residential Mortgage. But that firm was purchased by Roslyn Bancorp in 1995, which was in turn snapped up by New York Community Bank in 2003.
After a few weeks, we tracked down the right incarnation, but it said it would need the loan number to investigate further. As it wasn’t Moore’s mortgage, he didn’t have a loan number.
We then turned to Moore’s title insurance company – Old Republic Title – to see if it could help clear up the mess.
We also reached out to the current homeowners’ title insurance company, Fidelity National Title, and we got a call back from Weichert Title Agency, which is an agent of Fidelity.
We hooked up Weichert/Fidelity with Old Republic Title and they had a few chats.
This is where the heroes of the story – those willing to dig in deep to follow the paper trail with no personal benefit – stepped forward.
After researching the Moore case, Robert Brittingham, a Weichert VP and chief of operations, explained what he thought happened.
“[The paperwork] doesn’t list that mortgage as an exception to title, meaning at some point there was evidence it was paid,” he said.
Yet, the cancellation of the mortgage was never recorded.
Could he help get the proof Miller needed?
Weichert’s spokeswoman, Nicole Milluzzo, said it was in the works.
“We asked for a Discharge of Mortgage document from the company that serviced that mortgage and asked for it to be expedited,” she said in an email back in July 2011. “The title company who originally closed the transaction has requested the mortgage discharge a few times also, yet it is still open of record.”
She said she was told it could take a couple of weeks at a minimum to get the document.
So we waited. And Moore waited. As time passed, and Bamboozled moved on to other consumers’ problems.
That’s where the mea culpa comes in: When Bamboozled takes on a case, we take it to the end, whether there’s a satisfying resolution or a lack of one. This time, the Moore case dropped off our radar and we didn’t follow up with the tenacity we usually do.
But unexpectedly, on Nov. 30, the case was resurrected by the folks at Weichert/Fidelity.
Bamboozled received an email from Milluzzo, complete with a copy of the long-sought mortgage discharge document, stamped by the Union County clerk’s office.
She said the attorneys involved had already been notified.
We checked with Sicheri, the attorney who was holding the escrow funds. He said yes, and he was planning to mail checks to the attorneys of Moore and his girlfriend in the second week of December.
Next we checked in with Fidelity/Weichert’s Brittingham to understand what happened.
“I think probably what happened was [Old Republic Title], which insured the transaction, had enough evidence that the mortgage was paid – the HUD, the checks,” Brittingham said. “Later down the line when we got the policy, we omitted the mortgage under the title insurance treaty because it was already covered under a different title insurance policy.”
“This is why you get title insurance,” Brittingham said.
We called Moore with the good news.
“Wow, that is fantastic,” he said.
We wondered what he planned to do with the money.
“I guess I’ll put it in my checking account,” he said. “I’m always out there helping the economy.”
Many thanks to the team at Weichert/Fidelity for keeping Moore’s case alive, and to Old Republic for its helping hand, even without weekly calls from a sometimes nudgy reporter.