The Tampa Tribune and Shannon Behnken set the local real estate community buzzing on Sunday with the story of Dawn Mohen. 
Dawn appears to either be a great Realtor or a really bad criminal, maybe a bit of both. For the past couple of days the Trib has published follow up pieces detailing the widespread fraud that Mohen seems to have been at the center of and the pathetic excuses that her accomplices have said while trying to scramble out from under possible indictments.
“As long as I got my $180,000, I didn’t care what they were doing,” said John Dieumegarde [seller]
and then,
One listing agent sold two homes to the group. Jennifer Gay of Shirley International Realty in St. Petersburg said her primary responsibility was to represent the sellers and get the price they wanted.
“These are the first two deals I’ve encountered that were structured this way,” Gay said. “It was unusual, but my sellers were happy.”
Although a residential seller can claim protection from fault since they were represented by a professional and can’t be expected to be familiar with real estate transactions the Realtor herself should have known that this was illegal.
J.T. Pelt, company president and chief executive [of Linsky Title], said the two men told him about their business strategy, and he told them he would work with them “as long as the lender knows and the seller knows and the buyer knows.”
Yeah… no. The article then quotes other professional real estate folks who were involved with the transactions and claimed that they thought everything was on the up and up while every thing that they were asked to do violated very basic principles and customs of real estate. Even if they were not directly involved with the fraud this makes clear that they had to know what was happening.
You do not increase the price of your listing by tens of thousands of dollars to the price. Other than fraudulently getting money from the lender there is no other reason for this. Lenders cap “concessions” (money returned to the buyer to help with closing costs) at 6% of the sales price.
By custom the seller always picks the title company. It is so ingrained that many real estate brokers own title companies for their agents to use, making a nice source of revenue since sellers rarely care who the title company is the agent can direct the business to the in house company.
Monday morning I got a frantic email from my own Broker (who is a pretty straight arrow):
“IF YOU HAD ANY CLOSINGS INVOLVED THESE INDIVIDUALS, OR IF YOU HAVE A CONTRACT PENDING THAT IS DELAYED BECAUSE OF THE SITUATION, PLEASE CALL ME ASAP!”
That is good advice for anybody who has had a real estate transaction lately, check your settlement statements (provided at your closing) and make sure that none of the people involved have been named in these articles.