Lesley Karen Williams and North American Title Company (“NATCO“) are the subject of a Texas Department of Insurance (the “Department”) public hearing set for February 14, 2012. The hearing is being held to consider disciplinary action against Williams and NATCO.
According to the Department’s Notice of Hearing, Williams, a licensed Texas escrow officer since February 12, 1992, and NATCO, a licensed Texas title agent since May 14, 1999, are alleged to have handled and overseen at least 7 transactions in 2006-2007 involving large parcels near Manor, Texas. “The transactions were characterized by improper and inadequately documented interfile transfers of proceeds, disbursement of proceeds contrary to or inconsistent with settlement statements prepared for the transactions, the apparent use of false or misleading settlement statements, and other improper escrow and escrow accounting practices.” (Notice of Hearing, pg. 3, para. 4)
Specifically, the Notice sets forth transactions in which borrowers obtained loans that were closed by Williams and NATCO where the escrow proceeds from the loans were not disbursed as set forth in the settlement statement. The settlement statements were prepared to suggest: 1) that funds were being disbursed to the borrower when, in actuality, the proceeds were improperly diverted to a third party, and/or 2) that the borrowers were providing the down payment when, in fact, the down payment was made by the seller. In some instances, proceeds and disbursements were received and made without corresponding reference in the settlement statement and appeared to lack any relationship to the transaction.
The Notice further provides that the conduct above, if found true, constitutes grounds for revocation of Williams‘ escrow license, NATCO‘s title agent license and potentially additional sanctions.