Escrow fraud is not a new problem, it’s been covered in the media for years. Florida’s CFO has issued a press release concerning the conduct of an unlicensed Miami man who represented himself as an insurance agent, and stands charged with 72 counts of fraud. George Garcia, 69, is suspected of embezzling nearly $50,000 in escrow payments from would-be homeowners. He faces 12 counts each of uttering a forged instrument, grand theft, organized scheme to defraud, unlicensed insurance activity and affiliation with unlicensed insurance activity. However, this may be the tip of the iceberg, and investigators are seeking additional victims. This comes on the heels of George Kalivretenos receiving a seven year sentence for his part in defrauding homeowners of $4.18 million in down payments, in a scheme in which he controlled both the property, and the escrow services related to a hotel condo in Miami.
Under Florida law, real estate agents, insurance agents (including title insurance agents), are required to hold licenses and be subject to the rules and regulations governing their profession. First time buyers, and buyers from out of the country can find themselves taken advantage of because they don’t know where to look to verify a license – or even if one is required. Further, principals are required to disclose any financial interests in the companies that they are recommending to their clients. Upon finding an insurance agent or title agent you should be able to look up the insurance agent’s license or disciplinary standing on websites provided for that purpose. Agents must comply with all conditions of their license or face fines, suspension, or revocation. Realtors are likewise licensed, governed, and regulated. Their license information and status can be looked up online as well as any disciplinary actions on record.
Saving Money Isn’t Worth It
One of the biggest arguments against using licensed professionals is the cost. However, those costs are costs that give you recourse in case something goes horribly wrong. Just like hiring an unlicensed contractor can result in losing your homeowners insurance – or even your house – using an unlicensed insurance agent or real estate professional can result in financial losses that you cannot sustain without having recourse. Licenses and regulation exist to protect the consumer from the depredations of a few bad actors, and provide for enforcement actions and compensation to the victims. The requiring of licenses also guarantees that upon revocation of a license that person will not be able to practice their profession in the state again.
Very simply, real estate fraud and mortgage fraud are attractive to bad actors because of the large amounts of money that routinely change hands. Look for agencies and firms that have routinely good reviews. Buying a home is a huge step, and an investment of years of work and savings, don’t put it in the care of someone you haven’t checked out.