Home Sales Draw More Scrutiny

By SHANNON BEHNKEN The Tampa Tribune

Published: Oct 25, 2006

TAMPA - Two more state agencies launched investigations Tuesday into transactions involving inflated prices on dozens of homes, clustered mainly in St. Petersburg and Pinellas Park.

In addition, the owner of a Tampa mortgage company said she filed a formal complaint with the state Office of Financial Regulation.

The transactions, detailed Sunday in an investigation in The Tampa Tribune, had recorded sales prices averaging $60,000 above the original list price. The money above the price the seller received - at least $2 million collectively - was paid to companies connected to the real estate agent. The same real estate agent and the same title company were involved in the deals.

The state Department of Financial Services, which has oversight of title companies, is investigating Tampa-based Ocean Title & Abstract's role in 36 transactions, department spokeswoman Nina Banister said.

The Office of Financial Regulation, which regulates lending institutions, opened investigations into Tampa real estate agent Dawn L. Molen and Chad Evans, managing member of Clearwater-based Tye Funding, said Lara Royal, local area financial manager for the agency.

Michelle Darby, owner of TLW Mortgage Lending, said she is turning her files over to the state agency and filed a complaint with Stewart Title, which underwrites title insurance for Ocean Title. Molen at one time was a mortgage broker at Darby's company, and Darby said she confirmed with one lender that two sets of settlement documents were created on one of Molen's deals.

"When I got those [settlement documents], I was floored," Darby said.

Meanwhile, Countrywide Mortgage, the nation's largest mortgage lender, said it launched an internal investigation into mortgages it funded.

These investigations follow two others, confirmed Monday.

State Attorney General Charlie Crist opened a criminal investigation, and the Department of Business and Professional Regulation requested documents from brokers and appraisers with knowledge of Molen's sales.

"All of our investigations are overlapping right now, but we'll work together to figure this out," said Banister, with the Financial Services Department.

The regulatory agencies can revoke licenses and issue fines, up to $5,000 per offense. If the agencies determine laws have been broken, they will refer the cases to law enforcement, said Royal, with the Office of Financial Regulation.

Molly Boston, managing director for Ocean Title, did not a return a phone call seeking comment for this story. Molen did not return a message left on her cell phone. Evans could not be reached.

The Tribune's story showed all of Molen's sales involved the same title company and most of her buyers lived in Indiana. The investors said they belonged to an investment group led by Evans and Chris Malcom.

In two cases, different sets of settlement documents were sent to the lender and Molen's broker. In one transaction, the broker's set shows a $120,000 "payoff" going to one of the companies Molen worked with. The lender's copy doesn't show the payoff. The signature of Michelle Fabry, an Ocean Title employee, appears on both documents, as do the signatures of the buyer and the seller.

Misrepresenting where money goes on closing statements is against federal and state laws.

Settlement documents reviewed by the Tribune did not disclose the true amount paid to the seller or who received the difference between that amount and the recorded sales price.

Reporter Shannon Behnken can be reached at (813) 259-7804 or sbehnken@tampatrib.com.