ComplaintsforBlue Sky Closing Services Inc

• Initial Complaint

  06/21/2023

  Complaint Type:

  Order Issues

  Status:

  Answered

  More info

  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

  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 response

  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,
  ****** ****

*Some consumers may elect to not publish the details of their complaints, some complaints may not meet BBB's standards for publication, or BBB may display a portion of complaints when a high volume is received for a particular business. ↩