All Forum Posts by: Tom Gimer

Got a good one for you, Jay... bank error resulted in two duplicate wires being sent to the same seller. Demand was made... promises, stalling and excuses ensued. A fool would see exactly where that was heading.

They managed to spend some of the "free money" but the account was quickly frozen and judgment entered for constructive trust in the full amount plus the cost of the bond, interest and attorneys fees. Bank released the entire amount upon presentation of the Order.

The purpose of the CPL is to expand coverage beyond the commitment/policy and beyond the title insurer itself to others involved in the process (title agents)... your scenario.

Quick search -- https://houston.fntic.com/getattachment/6efdc91c-3146-46bc-a...

I was saying start the analysis there as that would seem be the simplest route to recovery.

First things first... did you receive a closing protection letter?

IMO the best investor contracts are short and simple enough so as to not be intimidating to sellers, but comprehensive enough to include all the necessary buyer protections and local requirements.

@Michael Morrongiello Oh I know the agreements and the documents used in these transactions. My issue is that a bank/banker should not allow a POA to be used to benefit the agent. The important language in your reply is "on their behalf" -- redirecting the principal's funds is not acting on their behalf.

Seems to me the smartest/easiest way to deal with lender escrow accounts is to have that feature eliminated from the loan ASAP in the subto process... preferably immediately after an annual tax disbursement reduces the account balance to a low point.

But yes, when the principal dies so does the power.

Yes, an entity can be appointed as attorney-in-fact for an individual.

My concern about the above... an attorney-in-fact depositing the funds of the principal into their own account would be an obvious breach of fiduciary duty.

Was the full purchase price paid to the title company, or just the taxes?

If the latter, both buyer and title company may have just created major problems for themselves.

@Alan F. Had 1) an assignment or 2) an entity acquisition been possible rather than a (fat) double-close, this would now be the end buyer's problem. And there would be no unanticipated holding costs... the insured could just let the insurer cure the defect once discovered, if ever.

I'm amazed the title company actually did more title exam work and discovered their recent error in the small gap between the two closings. That's just bad luck... not really something DD would catch.

All I said was that I was following this thread to hear how trying to save a few $ works out. 

@Peter Walther may chime in

Following to hear how skimping on the expenses involved in a true double close works out.

I doubt a hold-open or a binder provides the coverage that will be needed here. And lost “profits”??? lol stop 

I have actually fired clients for trying to close on the A—>B of a double close without title insurance. No, not just for being cheap… for being stupid.