CHECKING ID AT CLOSING

I was doing a closing recently where title was held in the name of John Doe.   The name on the seller's driver license was John Doe Jr.  and the seller had no other ID.   A definite red flag situation, although the seller gave a reasonable explanation for this discrepancy in his names and told us that his father had passed away many years ago.   Was the person sitting in front of me the owner of the property, or his son acting as an impostor?   Even if he produced a second ID with no "Jr." on it, the risk was there.  The first thing I checked was the seller's mortgage being paid off at closing.  I went on ACRIS and pulled a copy to see of the signature on the mortgage matched the signature on the the driver license and the documents signed at closing, which it did.  I then ascertained the age of the Seller.  Obviously if title was taken thirty years ago and the guy was twenty eight  years old, we had a problem.   It turned out that the Seller was in his late fifties and he would have been twenty eight when he bought the house.  Just in case, I asked him how old he was when he bought the house and he answered the right age.   For what ever it was worth, I also made sure that the checks for the proceeds were made out to John Doe and not to John Doe Jr.  In the end I was reasonably satisfied but not one hundred percent certain that this was the real seller.   When there are variations between the ID and the name on title, there is often no iron clad way to establish the seller's identity.   However,  the title company and the attorneys at the table must take steps to to at least reasonably verify the seller's identity and then make a judgment call whether  to accept such verification.  Unfortunately,  title closers often do not closely check ID or think that incomplete matches are fine, and attorneys relying on the title closers, don't even bother to look.

2012 NYC Annual Lien Sale Lists Available

http://www.nyc.gov/html/dof/html/property/property_bill_taxlien.shtm

OFFERING PLANS WILL BE AVAILABLE IN DIGITAL FORMAT

The New York Attorney General has announced a new policy that will require developers to give prospective purchasers the option of receiving offering plans in digital format (mandatory as of 4/1/2012).

Follow this link for the official AG announcement:  http://www.ag.ny.gov/media_center/2012/jan/jan30a_12.html

LAWYERS WATCH OUT FOR THIS SCAM

A purchaser, usually from overseas, approaches your client, the seller, to buy their house or apartment. This purchaser, may not have a lawyer, and being from outside the country, asks you to recommend an attorney. The purchaser suggests to sign the contract by pdf. through the internet and wants to give a contract deposit greater than 10%.  Lets use an example of $ 100,000.00. The purchaser signs the contract and sends you a $ 100,000.00 official bank check from an American bank. You deposit the check in your escrow account. Immediately, the purchaser pulls out of the deal and asks you wire back the contract deposit, but generously offers for your client to keep a large portion, such as $ 50,000.00 for his or her trouble.
Here is the catch. Many banks will make the money available in your escrow account before the official check is actually and fully cleared. You wire $ 50,000.00 back to the purchaser. In the next few days,  your bank notifies you that the official check is counterfeit and $ 100,000.00 is retracted from your escrow account. However, you have already wired $ 50,000.00 back to the purchaser and your account is now $ 50,000.00 short.
Believe it or not, under the servicing agreement with your bank,  you may be responsible for the loss even though the funds were available for wiring the next day after the deposit.   It actually takes at least several days and sometimes longer for the banks to fully clear a check. Your bank will now go after you for the $ 50,000.00.

Be very careful if you encounter a similar fact pattern in your practice. It may very well be a scam. Also know that banks routinely make available funds deposited by check in your account even though the check has not cleared. Always make sure that a check you have deposited is fully and finally cleared before writing any checks or sending wires against it.

Hello everyone and welcome to me new blog about title insurance and real estate law in New York.