Complaints

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• Initial Complaint

  Date:06/21/2023

  Type:Order Issues
  Status:

  AnsweredMore info

  Complaint statuses

  Resolved:

  The complainant verified the issue was resolved to their satisfaction.

  Unresolved:

  The business responded to the dispute but failed to make a good faith effort to resolve it.

  Answered:

  The business addressed the issues within the complaint, but the consumer either a) did not accept the response, OR b) did not notify BBB as to their satisfaction.

  Unanswered:

  The business failed to respond to the dispute.

  Unpursuable:

  BBB is unable to locate the business.

  I previously filed a review with you concerning Blue Sky Closing but now it should be a complaint. My mother passed away March 18,2020. We wanted to sell her home and Blue Sky was used I believe via our realtor. I did research and provided them with the account numbers for my mothers Citizens home loan because they "couldn't " find them. That was their job to do the research. At closing no mention of a balance or money needed. I have proof. Now because they didn't do their job, they are refusing to release the money. They are a neutral participant and have no right to hold the money. My family demands the money ASAP. The owner/manager was very uncooperative and unprofessional. They may have dozens of "happy clients " but one unhappy client is an unhappy client. I can provide paperwork if necessary. We would appreciate a quick response. This has been dragging on for far too long and we'd like to move on. Thank you.

  

  Business Response

  Date: 06/27/2023

  I am a title insurance agent.  I handle residential and commercial real estate
  transactions.  We search title, prepare closing
  documents, record deeds and mortgages and issue title insurance policies to the
  buyer, and when there is a purchase money mortgage, we insure the lender.
  I am, typically, referred to a buyer by the real estate
  agent.  Since the buyer pays for the
  title insurance premium, therefore, the buyer (and when in cases of purchase money
  mortgage), the lender and the realtor are my “clients”, if you will.
  It is my job to be sure that the property being transferred
  to the buyer is free and clear from prior owner issues, including, but not
  limited to mortgages, judgments, tax liens, etc.
  In this case, the contract arrived on 6/2/21 with and
  estimated closing date of 6/28/21.  The
  seller was an Estate, represented by the decedent’s daughter, as Executor.  The Executor had both Estate counsel and a
  realtor at time of closing, working on her behalf.
  Our title search arrived 6/13/21 and we were made aware of an
  open mortgage to Citizens bank in the original amount of $20k, taken in
  2012.  This mortgage was a line of
  credit.  This is different from a typical
  mortgage, because on an open-end line of credit, it can be used/paid,
  used/paid, similar to a credit card.
  On 6/13/21, we notified the realtor for seller about the
  open mortgage.  The realtor immediately
  replied that the “seller” did not know about the open mortgage.  He asked for a copy of the recorded document,
  and I supplied it.
  On 6/14/21 we issued our title insurance commitment to the
  buyer, also evidencing the mortgage in question.
  Someone from my office and the seller communicated verbally
  and the seller provided two possible account numbers for Citizens.  She mentioned that she recently received a
  notice from Citizens that the account number was recently changed.  **Side Note, we learned through this
  investigation, that Citizens was changing account numbers of recently passed
  clients, from HELOCS, to first (closed end) mortgages.  This was, apparently, in an effort to prevent
  executors of estates and/or family members with access to HELOC checks from using
  lines of credit after the mortgagor died. 
  This act is a very common fraud in America which, often, burdens the title
  insurance industry.
  My office attempted the payoff for both account numbers and
  received ONE payoff statement from Citizens showing a zero balance.
  We prepared the closing statement and for the line regarding
  payoff we reflected the zero balance and wrote “Citizens Bank, to be Sat”
  (short for satisfied).  If the seller had
  any knowledge of a balance due to Citizens, she was responsible to admit the
  same at closing.  Her mother died in
  March 2020.  So, the seller/claimant was
  handling the estate paperwork for a year before closing.  She received the notice about the second
  account number, so, we trust, she was also receiving monthly statements.
  The seller signed the closing statement with the zero
  balance and affirmed that she had carefully reviewed the HUD-1 Settlement
  Statement and to the best of her knowledge, it was true and accurate.  The seller also signed an affidavit affirming,
  among other things:  That there are no liens or encumbrances, mortgages, deeds of trust, judgments, tax lien, mechanics liens, easements, bankruptcies, or pending suits adversely affecting the owner(s) and the premises which are known to the undersigned and not being properly provided for in this transaction.

   Additionally, the seller signed the zero-balance payoff
  letter from Citizens Bank.

  We closed on June 28, 2021 and the Estate received proceeds in
  excess of $54k, without any mention of a balance owed to Citizens Bank.
  We issued an Owners Title Insurance Policy to the buyer on
  8/7/21.
  On 12/8/21, the buyer, notified my office with a Notice of
  Default from Citizens Bank demanding past due balances of $2427.  We immediately notified the seller’s
  attorney.  We were confused because we
  had received a zero-balance letter at closing. 
  Our first thought was that the Executor or a family member had been
  using the line of credit after closing. 
  **I went into the hospital for Covid from 12/16/2021 to
  1/27/2022 so there was no activity in my absence.
  3/18/22 The buyer, my insured, received a certified letter,
  address to her LLC of which title is held, asking for $21,450.81 plus penalties,
  for monthly payments missed from April 2020 to March 2022.  Obviously, there was a balance due on this
  mortgage, at the time of our closing.
  The claimant in this complaint suggests the Blue Sky was
  hired to negotiate the balance of her mother’s mortgage payoff.  She was represented by an estate attorney and
  a real estate agent.  Both, of whom, know
  better.  I cannot fathom where the seller/claimant
  would get this idea.  At the end of the
  day, she withheld information necessary to clear title.
  3/18/21 we mailed a certified letter to the estate attorney,
  and cc’d Citizens attorneys and the buyer, demanding payment of the mortgage in
  full.  The estate attorney confirmed
  receipt and noted that she and the executor/seller/claimant had contacted
  Citizens Bank directly.  Ultimately, the
  estate attorney replied on 4/25/22 that the proceeds of the estate were distributed
  to the beneficiaries and there was no money to pay Citizens. The estate attorney washed her hands of the situation.
  I contacted my attorney for advice on 4/30/22 and we agreed
  that the buyer needed to file a claim on her title insurance policy with First
  American (with whom I wrote this policy). 
  Once First American received the claim, they negotiated the balance with
  Citizens and made the payment which resulted in a satisfaction and, finally,
  clear title for the buyer.
  The seller/claimant learned through certified letters to
  her, from First American, that an escrow balance of $4k was being held by my
  office (for another matter) and, only now, after two years of ignorance is
  demanding release of that escrow to her. 
  However, First American (from what I have been told, I am not a party) is suing the estate for the same to be released
  to them to recover a portion of what they lost in the satisfaction.
  The seller has called my office many times and many times, I
  have explained this situation to her.  I
  have encouraged her to call an attorney. 
  I have encouraged her to call First American to resolve this.  She argues that we are “in cahoots”.  This matter is upsetting for all parties and
  could have been avoided if the executor was honest at the time of closing.
  There may have been a Truth In Lending error on behalf of
  Citizens Bank.  This is something that
  the seller/claimant would have to pursue, if so.  Otherwise, Blue Sky did our job with honesty,
  integrity and diligence.  Between the
  executor, the attorney for the estate and the realtor, someone could have
  admitted a balance was due to Citizens to prevent this entire event.
  I am sorry that the seller/claimant is so unhappy, but her anguish
  does not compare to what I have done, the time that my attorney has put into this,
  the time and effort that First American has put into this and the annoyance,
  frustration and interruption that this has caused the buyer, insured.
  I wish the seller good luck but I cannot release $4k to
  her based on her demand, here.  It has been turned over to First
  American and will continue to be held in escrow pending resolution between
  them, separately. 
  If you would like any support from my file to justify the
  details in this report, please let me know.  Thank you.

  Customer Answer

  Date: 07/05/2023

  Better Business Bureau:
  
  
  
  I have reviewed the response made by the business in reference to complaint ID ********* and have determined that this does not resolve my complaint.  For your reference, details of the offer I reviewed appear below.
  
  
  
  [To assist us in bringing this matter to a close, we would like to know your view on the matter.]
  
  
  
  Regards,
  
  
  ****** ****